Department of Energy: Friday, November 3, 2006

Friday,
November 3, 2006
Part II
Department of
Energy
Federal Energy Regulatory Commission
18 CFR Part 40
Mandatory Reliability Standards for the
Bulk-Power System; Proposed Rule
sroberts on PROD1PC70 with PROPOSALS
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64770 Federal Register / Vol. 71, No. 213 / Friday, November 3, 2006 / Proposed Rules
DEPARTMENT OF ENERGY we believe that many of these Reliability comments via the eFiling link found in
Standards require significant the Comment Procedures section of the
Federal Energy Regulatory improvement to address, among other Preamble.
Commission things, the recommendations of the • Mail: Commenters unable to file
Blackout Report. We therefore propose, comments electronically must mail or
18 CFR Part 40 pursuant to section 215(d)(5), to require hand deliver an original and 14 copies
the ERO to make significant of their comments to: Federal Energy
Docket No. RM06–16–000] improvements to many of the 83 Regulatory Commission, Office of the
Reliability Standards that are being Secretary, 888 First Street. NE.,
Mandatory Reliability Standards for the approved as mandatory and enforceable.
Bulk-Power System Washington, DC 20426. Refer to the
Appendix D provides a list of the Comment Procedures section of the
October 20, 2006. Reliability Standards that should be preamble for additional information on
AGENCY: Federal Energy Regulatory given the highest priority when the ERO how to file paper comments.
Commission, DOE. undertakes to make these
improvements. With respect to the FOR FURTHER INFORMATION CONTACT:
ACTION: Notice of proposed rulemaking.
remaining 24 Reliability Standards, the Jonathan First (Legal Information),
SUMMARY: Pursuant to section 215 of the Commission proposes that they remain Office of the General Counsel, Federal
Federal Power Act (FPA), the pending at the Commission until further Energy Regulatory Commission, 888
Commission is proposing to approve 83 information is provided. The First Street, NE., Washington, DC
of 107 proposed Reliability Standards, Commission is not proposing to remand 20426, (202) 502–8529.
including six of the eight regional any Reliability Standards. Paul Silverman (Legal Information),
differences, and the Glossary of Terms The Commission proposes to amend
Office of the General Counsel, Federal
Used in Reliability Standards developed the text of its regulation to require that
Energy Regulatory Commission, 888
by the North American Electric each Reliability Standard identify the
First Street, NE., Washington, DC
subset of users, owners and operators to
Reliability Council, on behalf of its 20426, (202) 502–8683.
which that particular Reliability
wholly-owned subsidiary, the North Robert Snow (Technical Information),
Standard applies. The Commission also
American Electric Reliability Office of Energy Markets and
is proposing to amend its regulations to
Corporation (NERC), which the Reliability, Division of Reliability,
require that each Reliability Standard
Commission has certified as the Electric Federal Energy Regulatory
that is approved by the Commission will
Reliability Organization (ERO) Commission, 888 First Street, NE.,
be maintained in the Commission’s
responsible for developing and Washington, DC 20426, (202) 502–
Public Reference Room and on the
enforcing mandatory Reliability 6716.
ERO’s Internet Web site for public
Standards. Those Reliability Standards
inspection. Kumar Agarwal (Technical
meet the requirements of section 215 of
the FPA and Part 39 of the DATES: Comments are due January 2, Information), Office of Energy Market
Commission’s regulations. However, 2007. and Reliability, Division of Policy
although we believe it is in the public Analysis and Rulemaking, Federal
ADDRESSES: You may submit comments,
interest to make these Reliability Energy Regulatory Commission, 888
identified by Docket No. RM06–16–000,
Standards mandatory and enforceable First Street, NE., Washington, DC
by one of the following methods:
by June 2007, we also find that much • Agency Web site: http://ferc.gov. 20426, (202) 502–8923.
work remains to be done. Specifically, Follow the instructions for submitting SUPPLEMENTARY INFORMATION:
Paragraph
Numbers
I. Introduction ......................................................................................................................................................................................... 1
II. Background ......................................................................................................................................................................................... 12
A. Voluntary Reliability Standards ................................................................................................................................................ 12
B. EPAct 2005 and Order No. 672 ................................................................................................................................................. 15
C. The Electric Reliability Organization ........................................................................................................................................ 21
D. NERC Petition for Approval of Reliability Standards .............................................................................................................. 24
E. Staff Preliminary Assessment ..................................................................................................................................................... 29
III. Discussion ......................................................................................................................................................................................... 33
A. The Commission’s Reliability Standards Proposal .................................................................................................................. 33
1. Applicability ........................................................................................................................................................................ 35
2. Mandatory Reliability Standards ........................................................................................................................................ 37
3. Availability of Reliability Standards .................................................................................................................................. 39
B. Applicability Issues .................................................................................................................................................................... 42
1. Definition of User of the Bulk-Power System .................................................................................................................... 42
2. Use of the NERC Functional Model .................................................................................................................................... 44
3. Applicability to Small Entities ............................................................................................................................................ 49
4. Regional Reliability Organizations ...................................................................................................................................... 54
5. Bulk-Power System v. Bulk Electric System ...................................................................................................................... 60
C. Mandatory Reliability Standards ............................................................................................................................................... 72
1. Legal Standard for Approval of Reliability Standards ...................................................................................................... 72

2. Commission Options When Acting on a Reliability Standard ......................................................................................... 76
3. Prioritizing Modifications to Reliability Standards ........................................................................................................... 83
4. Trial Period .......................................................................................................................................................................... 90
5. International Coordination of Remands ............................................................................................................................. 94
D. Common Issues Pertaining to Reliability Standards ................................................................................................................ 96
1. Blackout Report Recommendations .................................................................................................................................... 97
Federal Register / Vol. 71, No. 213 / Friday, November 3, 2006 / Proposed Rules 64771
Paragraph
Numbers
2. Measures and Levels of Non-Compliance .......................................................................................................................... 103

3. Ambiguities and Potential Multiple Interpretations .......................................................................................................... 108
4. Technical Adequacy ............................................................................................................................................................ 113
5. Fill-in-the-Blank Standards ................................................................................................................................................. 116
E. Discussion of Each Individual Reliability Standard ................................................................................................................. 124
1. BAL: Resource and Demand Balancing .............................................................................................................................. 125
2. CIP: Critical Infrastructure Protection ................................................................................................................................ 217
3. COM: Communications ....................................................................................................................................................... 232
4. EOP: Emergency Preparedness and Operations ................................................................................................................. 263
5. FAC: Facilities Design, Connections, Maintenance, and Transfer Capabilities ............................................................... 343
6. INT: Interchange Scheduling and Coordination ................................................................................................................ 427
7. IRO: Interconnection Reliability Operations and Coordination ........................................................................................ 497
8. MOD: Modeling, Data, and Analysis .................................................................................................................................. 588
9. PER: Personnel Performance, Training and Qualifications ............................................................................................... 749
10. PRC: Protection and Control ............................................................................................................................................. 802
11. TOP: Transmission Operations ......................................................................................................................................... 951
12. TPL: Transmission Planning ............................................................................................................................................. 1037
13. VAR: Voltage and Reactive Control .................................................................................................................................. 1129
14. Glossary of Terms Used in Reliability Standards ............................................................................................................ 1151
IV. Information Collection Statement ................................................................................................................................................... 1157
V. Environmental Analysis .................................................................................................................................................................... 1171
VI. Regulatory Flexibility Act Certification .......................................................................................................................................... 1172
VII. Comment Procedures ...................................................................................................................................................................... 1177
VIII. Document Availability ................................................................................................................................................................... 1179
Appendix A: Proposed Disposition of Standards, Glossary and Regional Differences

Appendix B: Commenters on Staff Preliminary Assessment
Appendix C: Abbreviations in this Document
Appendix D: High Priority List
I. Introduction Reliability Standards that should be be enforced by the ERO, subject to

given the highest priority when the ERO Commission oversight.
1. Pursuant to section 215 of the undertakes to make these 4. On February 3, 2006, the
Federal Power Act (FPA), the improvements. With respect to the Commission issued Order No. 672,
Commission is proposing to approve 83 remaining 24 Reliability Standards, the which implements section 215 of the
of 107 proposed Reliability Standards, Commission proposes that they remain FPA and provides specific processes for
including six of the eight regional pending at the Commission until further the certification of one entity as the
differences, and the Glossary of Terms information is provided. The ERO, the development and approval of
Used in Reliability Standards (glossary) Commission is not proposing to remand mandatory Reliability Standards, and
developed by the North American any Reliability Standards. the compliance with and enforcement of
Electric Reliability Council, on behalf of 2. The Commission proposes to approved Reliability Standards.2 On
its wholly-owned subsidiary, the North amend the text of its regulations to April 4, 2006, NERC made two filings:
American Electric Reliability require that each Reliability Standard (1) An application for certification of
Corporation (NERC), which the identify the subset of users, owners, and NERC Corporation as the ERO and (2) a
Commission has certified as the Electric operators to which that particular petition for Commission approval of 102
Reliability Organization (ERO) Reliability Standard applies. The Reliability Standards, as well as eight
responsible for developing and Commission also is proposing to amend regional differences and a glossary of
enforcing mandatory Reliability its regulations to require that each terms.3 On July 20, 2006, the
Standards. Those Reliability Standards Reliability Standard that is approved by Commission issued an order certifying
meet the requirements of section 215 of the Commission will be maintained in NERC Corporation as the ERO.4 This
the FPA and Part 39 of the the Commission’s Public Reference rulemaking proceeding addresses
Commission’s regulations. However, Room and on the ERO’s Internet Web NERC’s submission of Reliability
although we believe it is in the public site for public inspection. Standards and represents the next
interest to make these Reliability 3. On August 8, 2005, The Electricity
Standards mandatory and enforceable Modernization Act of 2005, which is
2 Rules Concerning Certification of the Electric
by June 2007, we also find that much Reliability Organization; Procedures for the
Title XII of the Energy Policy Act of Establishment, Approval and Enforcement of
work remains to be done. Specifically, 2005 (EPAct 2005), was enacted into Electric Reliability Standards, Order No. 672, 71 FR
we believe that many of these Reliability law.1 EPAct 2005 adds a new section 8662 (February 17, 2006), FERC Stats. & Regs.
Standards require significant 215 to the FPA, which requires a ¶ 31,204 (2006), order on reh’g, Order No. 672–A,
improvement to address, among other 71 FR 19814 (April 18, 2006), FERC Stats. & Regs.
Commission-certified ERO to develop ¶ 31,212 (2006).
things, the recommendations of the mandatory and enforceable Reliability 3 The April 4, 2006 filing contained 102
Blackout Report. We therefore propose, Standards, which are subject to
Reliability Standards, a Glossary of Terms Used in

pursuant to section 215(d)(5), to require Commission review and approval. Once Reliability Standards and eight regional differences.
the ERO to make significant approved, the Reliability Standards may On August 28, 2006, NERC filed an additional 19
improvements to many of the 83 Reliability Standards and withdrew three of the 102
Reliability Standards. Eleven of the nineteen
Reliability Standards that are being 1 The Energy Policy Act of 2005, Pub. L. No. 109– reliability Standards replace those filed on April 4,
approved as mandatory and enforceable. 58, Title XII, Subtitle A, 119 Stat. 594, 941 (2005), 2006.
Appendix D provides a list of the to be codified at 16 U.S.C. 824o (2000). 4 ERO Certification Order, 116 FERC ¶ 61,062.
significant step toward achieving the 8. The Commission believes that, for processes to fill in the blanks satisfy our
statutory goal of mandatory and this period of transition from a procedural requirements, the
enforceable Reliability Standards. voluntary to a mandatory system of Commission is not in a position to
5. The ERO’s filing is comprehensive, compliance, the above course of action approve or remand such Reliability
and represents a significant effort by is appropriate when reviewing the Standards. Second, a proposed
NERC, the industry representatives who ERO’s first set of proposed Reliability Reliability Standard that would apply
serve on NERC’s standards development Standards. This action provides the only to regional reliability organizations
teams, and the entities that participate benefit that mandatory and enforceable will not be approved or remanded until
in NERC’s Reliability Standards Reliability Standards will be in effect the ERO identifies a user, owner or
development process. After the August prior to the summer of 2007, the next operator of the Bulk-Power System as
2003 cascading blackout that affected anticipated peak season for the nation’s the applicable entity.10
large portions of the central and eastern Bulk-Power System. Critical to our 11. Although the proposed Reliability
United States and Canada, NERC decision to propose to approve such Standards for which the Commission is
revised many of the then-existing NERC Reliability Standards is NERC’s requesting additional information will
operating policies and planning representation to the Commission that not be enforceable under section 215,
standards to provide greater clarity and approval of the existing Reliability this does not mean that no standards
compliance guidance. These revised Standards ‘‘will reinforce the governing a particular matter are in
standards (referred to as ‘‘Version 0’’ importance of these standards and will place. Rather, in the interim, though not
and ‘‘Version 1’’) were developed using have an immediate positive benefit with enforceable under section 215,
NERC’s American National Standards regard to the reliability performance of compliance with these Reliability
Institute (ANSI)-accredited Reliability all bulk power system owners, operator Standards would be expected as a
Standards development process and are and users * * *.’’ 7 matter of good utility practice.
what has been filed with the 9. Accordingly, the Commission II. Background
Commission for approval. proposes to approve the Reliability
6. The Commission believes that these Standards based on recognizing this A. Voluntary Reliability Standards
Reliability Standards will form a solid period of transition, the importance of 12. In the aftermath of the 1965
foundation on which to develop and making them mandatory before the blackout in the northeast United States,
maintain the reliability of the North summer of 2007, and by giving due the electric utility industry established
American Bulk-Power System. At the weight to the technical expertise of the NERC, a voluntary reliability
same time, the Commission recognizes, ERO with the expectation that the organization. Since its inception, NERC
as does NERC,5 that the Version 0 and Reliability Standards will accomplish has developed Operating Policies and
Version 1 standards were developed as the purpose represented to the Planning Standards that provide
an initial step in the transition to clear, Commission by the ERO; and that they voluntary guidelines for operating and
enforceable Reliability Standards. As will improve the reliability of the Bulk- planning the North American Bulk-
such, some technical, enforceability and Power System by proactively preventing Power System.
policy aspects of the 107 proposed situations that can lead to blackouts. By 13. A common cause of the past three
Reliability Standards submitted by the taking this approach, we believe that the major regional blackouts was violation
ERO can, and should, be improved. responsibility for the technical of NERC’s then existing Operating
7. Therefore, in evaluating NERC’s adequacy of the proposed Reliability Policies and Planning Standards. During
proposal, the Commission recognizes Standards falls squarely on the ERO, July and August 1996, the west coast of
that the Reliability Standards are in a and we expect the ERO to monitor the the United States experienced two
state of transition and that NERC has effectiveness of the proposed Reliability cascading blackouts caused by
ongoing plans to improve them. Thus, at Standards and inform us if any violations of voluntary Operating
this juncture, we will approve a Reliability Standard proves, in practice, Policies.11 In response to the outages,
proposed Reliability Standard that to be inadequate in protecting and the Secretary of Energy convened a task
needs clarification, improvement, or improving Bulk-Power System force to advise the U.S. Department of
strengthening, provided that we are reliability.
confident that it satisfies the statutory 10. Further, the Commission proposes is a geographical/physical reason for the difference.
requirement that a Reliability Standard to request additional information with Consolidation of regional standards into a single
regard to 24 proposed Reliability continent-wide standard should not result in a
must be ‘‘just, reasonable, not unduly lowest common denominator. Order No. 672 at P
discriminatory or preferential, and in Standards. These proposed Reliability 291.
the public interest.’’ 6 Rather than Standards would not be approved or 10 In addition, some of the proposed Reliability
remanding an imperfect Reliability remanded by the Commission until Standards overlap with other Commission
further action is taken by the ERO. This regulatory initiatives. For example, in a recent
Standard, the NOPR generally proposes Notice of Proposed Rulemaking, the Commission
to approve such a Reliability Standard. group of Reliability Standards includes has proposed to direct public utilities, in
In addition, as a distinct action under NERC’s so-called ‘‘fill-in-the-blank’’ conjunction with NERC and the North American
the statute, the Commission proposes to standards that require regional Energy Standards Board to provide for greater
reliability organizations to develop— consistency in Available Transmission Capacity
direct that the ERO modify such a (ATC) calculation. See Preventing Undue
Reliability Standard, pursuant to section and users, owners, or operators to Discrimination and Preference in Transmission
215(d)(5) of the FPA, to address the comply with—regional criteria.8 Until Service, 71 FR 32636 (June 6, 2006), 71 FR 39251
identified issues or concerns. This the Commission receives this (July 12, 2006), FERC Stats. & Regs. ¶ 39,602 (May
supplemental information to fill in the 19, 2006) (OATT Reform NOPR).
approach would allow the proposed
11 The Electric Power Outages in the Western

Reliability Standard to be enforceable ‘‘blanks’’ 9 and assurances that the
United States, July 2–3, 1996, at 76 (ftp://
while the ERO develops any required 7 NERC
www.nerc.com/pub/sys/all_updl/docs/pubs/
Petition at 25. doerept.pdf) and WSCC Disturbance Report, for the
modifications. 8 See id. at 87–90. Power System Outage that Occurred on the Western
9 The ERO is reminded when filling in these Interconnection August 10, 1996, at 4 (ftp://
5 See NERC Petition at 69. blanks that a regional difference is generally www.nerc.com/pub/sys/all_updl/docs/pubs/
6 16 U.S.C. 824o(d)(2). permitted when it is more stringent or when there AUG10FIN.pdf).
Energy (DOE) on issues needed to be NERC, as the ERO. The ERO is required a proposed Reliability Standard should
addressed to maintain the reliability of to develop Reliability Standards, which achieve its reliability goal effectively
the Bulk-Power System. In a September are subject to Commission review and and efficiently. A proposed Reliability
1998 report, the task force approval.16 Once approved, the Standard must do more than simply
recommended, among other things, that Reliability Standards may be enforced reflect stakeholder agreement or
federal legislation should grant more by the ERO, subject to Commission consensus around the ‘‘lowest common
explicit authority for the Commission to oversight.17 The Reliability Standards denominator.’’ It is important that the
approve and oversee an organization will apply to users, owners and Reliability Standards developed through
having responsibility for bulk-power operators of the Bulk-Power System. any consensus process be sufficient to
reliability standards.12 Further, the task The ERO must submit each proposed adequately protect Bulk-Power System
force recommended that such legislation Reliability Standard to the Commission reliability.19
provide for Commission jurisdiction for approval. 17. A proposed Reliability Standard
over reliability of the Bulk-Power 16. Section 215(d)(2) of the FPA and may take into account the size of the
System and Commission the Commission’s regulations provide entity that must comply and the costs of
implementation of mandatory, that the Commission may approve a implementation. However, the ERO
enforceable reliability standards. proposed Reliability Standard if it should not propose standards that
14. On August 14, 2003, a blackout determines that the proposal is just, would achieve less than operational
affected significant portions of the reasonable, not unduly discriminatory excellence or otherwise be inadequate to
Midwest and Northeast United States, or preferential, and in the public support Bulk-Power System reliability.
and Ontario, Canada. This blackout interest. The Commission specified in A proposed Reliability Standard should
affected an estimated 50 million people Order No. 672 certain general factors it be a single standard that applies across
and 61,800 megawatts of electric load. A would consider when assessing whether the North American Bulk-Power System
joint U.S.-Canada task force studied the a particular Reliability Standard is just to the maximum extent this is
causes of the August 14, 2003 blackout and reasonable.18 According to this achievable taking into account
and determined that several entities guidance, a proposed Reliability geographic variations in grid
violated NERC’s then-effective Standard must provide for the Reliable characteristics, terrain, weather, and
Operating Policies and Planning Operation of Bulk-Power System other factors. It should also account for
Standards, and that several of the facilities and may impose a requirement regional variations in the organizational
standards contained ambiguities that on any user, owner, or operator of such and corporate structures of transmission
rendered the standards ineffective. facilities. It must be designed to achieve owners and operators, variations in
Those violations and ambiguities a specified reliability goal and must generation fuel type and ownership
directly contributed to the blackout.13 contain a technically sound means to patterns, and regional variations in
The joint task force, in its achieve this goal. The proposed market design if these affect the
recommendations to prevent or Reliability Standard should be clear and proposed Reliability Standard. Finally, a
minimize the scope of future blackouts, unambiguous regarding what is required proposed Reliability Standard should
identified the need for legislation to and who is required to comply. The have no undue negative effect on
make reliability standards mandatory possible consequences for violating a competition.20 Order No. 672 directs the
and enforceable, with penalties for non- proposed Reliability Standard should be ERO to explain how the proposal
compliance and identified specific clear and understandable to those who satisfies the factors the Commission
ambiguities within the standards that must comply. There should be a clear identified and how the ERO balances
should be corrected to make the criterion or measure of whether an any conflicting factors when seeking
standards effective.14 entity is in compliance with a proposed approval of a proposed Reliability
Reliability Standard. While a proposed Standard.21
B. EPAct 2005 and Order No. 672 Reliability Standard does not 18. Pursuant to section 215(d)(2) of
15. EPAct 2005 adds a new section necessarily need to reflect the optimal the FPA and section 39.5(c) of the
215 to the FPA, which provides for a method for achieving its reliability goal, Commission’s regulations, the
system of mandatory and enforceable Commission is required to give due
Reliability Standards. On February 3, 16 Section 215(a)(3) of the FPA defines the term
weight to the technical expertise of the
2006, the Commission issued Order No. Reliability Standard to mean ‘‘a requirement,
approved by the Commission under this section, to
ERO with respect to the content of a
672, implementing section 215 of the provide for reliable operation of the bulk-power Reliability Standard or to a Regional
FPA.15 Pursuant to Order No. 672, the system. This term includes requirements for the Entity organized on an Interconnection-
Commission certified one organization, operation of existing bulk-power system facilities, wide basis with respect to a proposed
including cybersecurity protection, and the design
of planned additions or modifications to such Reliability Standard or a proposed
12 Maintaining Reliability in a Competitive U.S.
facilities to the extent necessary to provide for the modification to a Reliability Standard to
Electricity Industry, Final Report of the Task Force reliable operation of the bulk-power system, but the be applicable within that
on Electric System Reliability, Secretary of Energy term does not include any requirement to enlarge
Advisory Board, U.S. Department of Energy such facilities or to construct new transmission
Interconnection. However, the
(September 1998), at 25–27, 65–67. capacity or generation capacity.’’ 16 U.S.C. Commission is not required to defer to
13 The joint team, known as the U.S.-Canada 824o(a)(3). the ERO or a Regional Entity with
Power System Outage Task Force, issued a Final Section 215(a)(4) of the FPA defines the term respect to the effect of a proposed
Report on the August 14, 2003 Blackout in the ‘‘reliable operation’’ broadly to mean, ‘‘* * *
United States and Canada: Causes and
Reliability Standard or proposed
operating the elements of the bulk-power system
Recommendations (Blackout Report) on April 5, within equipment and electric system thermal, modification to a Reliability Standard
2004, which presented an in-depth analysis of the voltage, and stability limits so that instability, on competition.22
causes of the blackout and recommendations for uncontrolled separation, or cascading failures of 19. The Commission’s regulations
avoiding future blackouts. such system will not occur as a result of a sudden require the ERO to file with the
14 See id. at 140–42. disturbance, including a cybersecurity incident, or
15 Order No. 672, 71 FR 8662 (Feb. 17, 2006), unanticipated failure of system elements.’’ 16
19 Order No. 672 at P 329.
FERC Stats. & Regs. ¶ 31,204 (2006), order on reh’g, U.S.C. 824o(a)(4).
17 The Commission can independently enforce 20 Order No. 672 at P 332.
Order No. 672–A, 71 FR 19814 (Apr. 18, 2006),
Reliability Standards. 16 U.S.C. 824o(e)(3). 21 Id. at P 337.
FERC Stats. & Regs. ¶ 31,212 (2006). Terms defined
in Order No. 672 are capitalized in this order. 18 Order No. 672 at P 262, 321–337. 22 18 CFR 39.5(c)(1), (3).
Commission each new or modified enforcement authority to a Regional dash and the version number e.g., PRC–
Reliability Standard that it proposes to Entity.25 014–0.
be made effective under section 215 of 3. Purpose: One or more sentences
D. NERC Petition for Approval of
the FPA. The filing must include a that explicitly states the outcome to be
Reliability Standards
concise statement of the basis and achieved by the adoption of the
purpose of the proposed Reliability 24. On April 4, 2006, as modified on Reliability Standard.
Standard, a summary of the Reliability August 28, 2006 NERC submitted to the 4. Applicability:
Standard development proceedings Commission a petition seeking approval 4.1 Each entity, as defined by the
conducted by either the ERO or of the 107 proposed Reliability NERC Functional Model, that must
Regional Entity, together with a Standards that are the subject of this comply with the Reliability Standard,
NOPR (NERC Petition).26 NERC states such as Transmission Owner.
summary of the ERO’s Reliability
that 90 of these Reliability Standards,
Standard review proceedings, and a b. Requirements
known as ‘‘Version 0’’ standards,
demonstration that the proposed R1. A listing of explicitly stated
became effective on a voluntary basis on
Reliability Standard is just, reasonable, April 1, 2005. It explains that the technical, performance and
not unduly discriminatory or Version 0 standards ‘‘are a translation, preparedness requirements and who is
preferential, and in the public interest.23 with certain improvements, of NERC’s responsible for achieving them.
20. The Commission will remand to operating policies that were developed
c. Measures
the ERO for further consideration a over several decades and its planning
proposed new or modified Reliability standards, which were approved in M1. A listing of the factors and the
Standard that the Commission September 1997.’’ 27 In addition, the process NERC will use to assess
disapproves in whole or in part.24 When April 4, 2006 filing includes 12 new performance and outcomes in order to
remanding a Reliability Standard to the Reliability Standards that were determine non-compliance, and who is
ERO, the Commission may order a approved by the NERC board of trustees responsible for achieving the measures.
deadline by which the ERO must submit for implementation in February 2006. Measures are ‘‘the evidence that must be
a proposed or modified Reliability According to NERC, the 107 proposed presented to show compliance’’ with a
Standard. Reliability Standards collectively define standard and ‘‘are not intended to
overall acceptable performance with contain the quantitative metrics for
C. The Electric Reliability Organization regard to operation, planning and design determining satisfactory
of the North American Bulk-Power performance.’’ 28
21. NERC is a New Jersey nonprofit System. Seven of these Reliability
corporation with a membership d. Compliance
Standards specifically incorporate one
comprised of the eight regional or more ‘‘regional differences’’ (which 1. Compliance Monitoring Process
reliability councils covering the can include an exemption from a 1.1 Compliance Monitoring
contiguous 48 States, several provinces Reliability Standard) for a particular Responsibility: NERC’s explanation of
in Canada and a portion of Baja region or subregion, resulting in eight who is responsible for assessing
California Norte, Mexico. NERC has regional differences. NERC requests that performance or outcomes.
operated as a voluntary, industry- the Reliability Standards become 1.2 Compliance Monitoring Period
sponsored reliability organization effective on January 1, 2007, or an and Reset Timeframe: The timeframe for
formed to ensure the reliability of the alternative date determined by the each compliance monitoring period
North American Bulk-Power System. Commission. NERC also states that it before it is reset for the next period.
22. NERC filed an application with simultaneously filed the proposed 1.3 Data Retention: How long
the Commission on April, 4, 2006 Reliability Standards with governmental compliance documentation needs to
authorities in Canada. remain on file.
seeking certification as the ERO. NERC
25. Each proposed Reliability 1.4 Additional Compliance
stated that it expects NERC Council and
Standard follows a common format that Information: Any other information
NERC Corp. to merge upon being
includes five organizational elements: relating to compliance.
certified as the ERO by the Commission. 2. Levels of Non-Compliance: Usually
NERC Corp. will be the surviving entity a. Introduction four levels of non-compliance are
and will assume the assets and 1. Title: a phrase that describes the identified, with level 1 being used for
liabilities of NERC Council. topic of the Reliability Standard. the least severe non-compliance and
23. In its July 20, 2006 order certifying 2. Number: A unique identification level 4 for the most severe non-
NERC as the ERO, the Commission number that starts with three letters to compliance.
directed NERC to submit a compliance identify the group followed by a dash
and a three digit number, followed by a e. Regional Differences
filing incorporating various
clarifications and revisions to its bylaws Identification of any regional
and rules of procedure. Among the 25 Although the ERO Certification Order directs differences that have been approved by
improvements the Commission has NERC to modify the pro forma delegation the applicable NERC Committee
agreement, the pro forma agreement will not be re-
directed NERC to undertake as the ERO filed with the Commission before negotiating the
(including Regions that are exempt).
are changes to expedite the existing individual delegation agreements. The pro forma Version History: The chronological
process for developing new Reliability agreement will form the basis for the individual history of changes to the standard.
Standards in response to a Commission Regional Entity delegation agreements that will be 26. In its April 4, 2006 petition, NERC
filed with the Commission. ERO Certification requested ‘‘unconditional’’ approval of
deadline to deal with an urgent
Order, 116 FERC ¶ 61,062 at P 518.

situation. The order also directs NERC 26 The filed proposed Reliability Standards are
77 proposed Reliability Standards and
to modify its proposed pro forma not attached to this NOPR but are available on the the glossary of terms. Further, NERC
delegation agreement for delegating Commission’s eLibrary document retrieval system
in Docket No. RM06–16–000 and are available on 28 NERC Comments at 104. NERC clarified its
the ERO’s Web site, http://www.nerc.com/∼filez/ position that Measures did not include metrics after
23 18 CFR 39.5(a). nerc_filings_ferc.html. the Staff Preliminary Assessment interpreted the
24 18 CFR 39.5(e). 27 See NERC Petition at 28. Measures section as including metrics.
requested ‘‘conditional’’ approval of 25 regarding the appropriate action on a Alaska and Hawaii) including, but not
proposed Reliability Standards. particular proposal. limited to, the entities described in
27. In a June 26 filing, NERC revised 30. The Staff Preliminary Assessment section 201(f) of the FPA. This
its recommended action on the provided a basis for soliciting input statement is consistent with § 215(b) of
proposed Reliability Standards: (1) regarding which of the proposed the FPA and section 39.2 of the
Unconditional approval of 51 proposed Reliability Standards should be Commission’s regulations.
Reliability Standards, to become approved, approved on an interim basis, 36. Section 40.1(b) requires each
enforceable in the U.S. on a date in 2007 or remanded to the ERO; established a Reliability Standard made effective
to be determined by the Commission; (2) platform from which to identify and under this Part to identify the subset of
conditional approval of 26 proposed prioritize potential problems with the users, owners and operators to whom
‘fill-in-the-blank’ Reliability Standards, proposed Reliability Standards; and that particular Reliability Standard
to become enforceable in the U.S. on a provided a comprehensive and objective applies.
date in 2007 to be determined by the assessment of NERC’s then-current 102 2. Mandatory Reliability Standards
Commission. NERC recommends that Reliability Standards.
‘‘conditional approval’’ shall mean ‘‘that 31. Comments on the Staff 37. Section 40.2 (a) of the proposed
any limitation of the standard caused by Preliminary Assessment were due by regulations requires that each applicable
the presence of a regional ‘fill-in-the- June 26, 2006. Entities that filed user, owner or operator of the Bulk-
blank’ requirement * * * would be comments are listed in Appendix A to Power System comply with
considered as a factor in the evaluation this NOPR. Approximately 50 persons Commission-approved Reliability
of circumstances surrounding an alleged filed comments in response to the Staff Standards developed by the ERO, and
violation of the standard and the Preliminary Assessment. In addition, on provides that the Commission-approved
determination of a violation and setting July 6, 2006, the Commission held a Reliability Standards can be obtained
of an appropriate penalty;’’ and (3) technical conference to discuss NERC’s from the Commission’s Public Reference
conditional approval of another 25 proposed Reliability Standards, the Staff Room at 888 First Street, NE., Room 2A,
proposed Reliability Standards lacking Preliminary Assessment and other Washington, DC 20426.
Measures or Levels of Non-Compliance, related issues. The technical conference 38. Section 40.2(b) of the proposed
to become enforceable in the U.S. on a was transcribed, and is a part of the regulations provides that a proposed
date in 2007 to be determined by the record in this docket. modification to a Reliability Standard
Commission. In addition, NERC plans to 32. The written comments as well as proposed to become effective pursuant
file modified Reliability Standards in the panel discussions at the technical to § 39.5 shall not be effective until
early November 2006 that will add conference have been very informative, approved by the Commission.
missing Measures and Levels of Non- and reference to the public comments is 3. Availability of Reliability Standards
compliance elements as well as risk mentioned throughout the NOPR.
factors. NERC recommends that the 39. Section 40.3 of the proposed
Moreover, our proposed disposition of regulations would require that the ERO
Commission act on the proposed the Reliability Standards reflects our
modifications to Reliability Standards maintain in electronic format that is
consideration of all comments that were accessible from the Internet the
that are currently before the submitted.
Commission in the same proceeding to complete set of effective Reliability
achieve an initial set of Reliability III. Discussion Standards that have been developed by
Standards. the ERO and approved by the
A. The Commission’s Reliability Commission. The Commission believes
28. On August 28, 2006, NERC
Standards Proposal that ready access to an electronic
submitted 27 new and revised
standards. The Commission will address 33. The Commission’s proposed version of the effective Reliability
these proposed new and revised reliability regulation is entitled Standards will enhance transparency
Reliability Standards in this rulemaking Mandatory Reliability Standards for the and help avoid confusion as to which
proceeding, except for eight proposed Bulk-Power System. Section 215(b) of Reliability Standards are mandatory and
Reliability Standards that relate to cyber the FPA obligates all users, owners and enforceable. We note that NERC
security. Reliability Standards CIP–002 operators of the Bulk-Power System to currently maintains the existing,
through CIP–009 will be addressed in a comply with Reliability Standards that voluntary reliability standards on the
separate rulemaking proceeding in become effective pursuant to the NERC Web site.
Docket No. RM06–22–000. processes set forth in the statute and in 40. While the NOPR discusses each
Part 39 of the Commission’s regulations. proposed Reliability Standard and
E. Staff Preliminary Assessment identifies the Commission’s proposed
The complete text of the proposed rule
29. On May 11, 2006, Commission is provided in the Attachment to this disposition for each Reliability
staff issued a ‘‘Staff Preliminary notice of proposed rulemaking. Standard, neither the text nor the title
Assessment of the North American 34. The proposed regulation is of an approved Reliability Standard
Electric Reliability Council’s Proposed organized into three sections: would be codified in the Commission’s
Mandatory Reliability Standards’’ (Staff 40.1—Applicability; regulations. Rather, as indicated above,
Preliminary Assessment). The Staff 40.2—Mandatory Reliability each applicable user, owner or operator
Preliminary Assessment identified Standards; and of the Bulk-Power System would be
staff’s preliminary observations and 40.3—Availability of Reliability required to comply with Commission-
concerns regarding NERC’s then-current Standards. approved Reliability Standards that are
voluntary reliability standards. The Staff available in the Commission’s Public
Preliminary Assessment describes 1. Applicability

Reference Room and on the Internet at
issues common to a number of proposed 35. Section 40.1(a) of the proposed the ERO’s Web site.
Reliability Standards. It reviewed and regulations provides that this Part 41. This approach would preserve the
identified issues regarding each applies to all users, owners and statutory options of approving a
individual Reliability Standard but did operators of the Bulk-Power System proposed Reliability Standard or
not make specific recommendations within the United States (other than modification to a Reliability Standard
‘‘by rule or order.’’ 29 While we proposed Reliability Standard would represents a reasonable and practical
anticipate that the Commission would apply more broadly than the statute approach to determining the
address through the rulemaking process allows may raise their concern in the applicability of a particular Reliability
most, if not all, new Reliability context of the specific Reliability Standard. This approach is consistent
Standards proposed by NERC, certain Standard. We believe that this approach with the ERO Certification Order, in
modifications may be appropriately provides sufficient notice regarding which the Commission, in the context of
addressed by order. which entities are ‘‘users of the Bulk- addressing NERC’s proposed
Power System’’ that must comply with compliance registry, found that ‘‘NERC’s
B. Applicability Issues functional approach provides a
a specific Reliability Standard.
1. Definition of User of the Bulk-Power reasonable means to ensure that the
2. Use of the NERC Functional Model proper entities are registered and that
System
44. As mentioned above, each each knows which Commission-
42. In Order No. 672, the Commission Reliability Standard proposed by the approved Reliability Standard(s) are
acknowledged that, generally, a person ERO identifies entities to which the applicable to it.’’ 36 Thus, we agree with
directly connected to the Bulk-Power Reliability Standard applies based on NERC that identifying specific
System selling, purchasing or the NERC Functional Model.33 The Staff functional categories of entities that
transmitting electric energy over the comprise users, owners and operators of
Preliminary Assessment observed that
Bulk-Power System is a ‘‘User of the the Bulk-Power System provides a
the Functional Model omits the
Bulk-Power System.’’ However, the useful level of detail and appears to be
categories of ‘‘users, owners and
Commission declined to adopt a formal more practical than simply identifying
operators,’’ and includes other
definition, explaining that, ‘‘until we an applicable entity as a user, owner or
categories of entities that are not users,
have proposed Reliability Standards operator. Accordingly, we propose to
owners or operators of the Bulk-Power
before us, we will reserve further use the NERC functional model to
System.34
judgment on whether a definition of 45. NERC states that, while the term identify the applicable entities to which
‘User of the Bulk-Power System’ is ‘‘users, owners and operators’’ defines each Reliability Standard applies.
appropriate or whether the decision of the statutory applicability of the 47. We are mindful of the concerns of
who is a ‘User of the Bulk-Power Reliability Standards, the Functional certain commenters that the Functional
System’ should be made on a case-by- Model adds descriptive detail to Model may contain ambiguities and add
case basis.’’ 30 reliability functions so the applicability or omit certain entities or functions.
43. We do not propose a generic of each Reliability Standard can be Elsewhere in the NOPR we are
definition of the term ‘‘User of the Bulk- clearly defined. NERC explains that proposing to require NERC to
Power System.’’ Rather, the Commission ‘‘every entity class described in the specifically address these concerns.37
will determine applicability on a Reliability Functional Model performs Further we note that NERC’s Rules of
standard-by-standard basis.31 The functions that are essential to the Procedure pertaining to the NERC
phrase ‘‘user, owner or operator of the reliability of the bulk power system.’’ 35 compliance registry provide that NERC
Bulk-Power System’’ as used in section Several commenters concur with NERC will notify an entity before it is formally
215(b) of the FPA indicates the scope of and suggest that the Commission registered and allow an opportunity for
the Commission’s authority with regard approve the Functional Model so that an entity to challenge its inclusion on
to compliance with Reliability future modifications would require the compliance registry.38 This process
Standards. The proposed regulations Commission approval. MISO and should resolve any specific disputes
would require that the ERO identify in Allegheny point to specific examples of that may arise.
each proposed Reliability Standard the what they consider ambiguities in the 48. Some commenters suggest that
specific subset of users, owners and NERC Functional Model, primarily in any future modification to the
operators of the Bulk-Power System to the context of applicability to RTO or Functional Model could affect the
which the proposed Reliability Standard ISO functions. categories of entities that must comply
would apply. In fact, this is NERC’s 46. The objective here is to make sure with a particular Reliability Standard,
current practice, and each of the 107 that each Reliability Standard is without the benefit of the open,
proposed Reliability Standards sufficiently clear with respect to stakeholder process required when the
submitted by NERC includes an applicability and specifically identifies ERO develops a modification to a
‘‘applicability’’ provision that identifies each category of entities to which it Reliability Standard. Because the
the specific categories of applicable applies. The NERC Functional Model Functional Model is so closely linked
entities based on NERC’s Functional with applicability of the Reliability
Model.32 Parties concerned that a reliability authority to ‘‘reliability coordinator’’ and Standards, the Commission proposes to
explains its role in ‘‘wide area’’ reliability oversight. require the ERO to submit any future
29 See 16 U.S.C. 824o(d)(2). Both versions of the Functional Model are available modifications to the Functional Model
30 Order No. 672 at P 99. on NERC’s Web site at: http://www.nerc.com/∼filez/
functionalmodel.html.
that may affect the applicability of the
31 Many of the proposed Reliability Standards
apply to reliability coordinators and balancing 33 The functional categories include: (1) Reliability Standards for Commission
authorities and other clearly appropriate entities. Reliability coordinator, (2) balancing authority, (3) approval.
We believe that such Reliability Standards do not planning authority, (4) transmission planner, (5)
raise applicability issues. Thus, in our standard-by- transmission operator, (6) transmission service 3. Applicability to Small Entities
standard analysis, the Commission’s silence as to provider, (7) transmission owner, (8) resource 49. NERC indicates that a Reliability
applicability issues means that it agrees with the planner, (9) distribution provider, (10) generator
ERO’s proposed applicability of a Reliability owner, (11) generator operator, (12) load-serving Standard may identify limitations on
Standard. entity, (13) purchasing-selling entity, (14)

32 See NERC Petition at 80–81. For information compliance monitor. ERO Certification Order, 116 36 ERO Certification Order, 116 FERC ¶ 61,062, at
regarding the Functional Model, see NERC FERC ¶ 61,062, at n.247. P 689.
34 Staff Preliminary Assessment at 24. 37 For example, commenters’ concerns regarding
Reliability Functional Model, Function Definitions
and Responsibility Entities, Version 2, February 10, 35 NERC Comments at 96. In addition to its April applicability to ISOs and RTOs are discussed in
2004. NERC is currently developing revisions to the 4, 2006, Petition, NERC filed comments in response detail in the chapter on proposed communications
Functional Model (referred to as ‘‘Version 3’’) that, to the Staff Preliminary Assessment on June 26, Reliability Standards.
among other things, changes the name of the 2006 (NERC Comments). 38 See NERC Rule of Procedure section 501.1.3.
applicability based on electric facility implementation of these requirements 55. The Staff Preliminary Assessment
characteristics ‘‘such as generators with for applicable entities may vary based expressed concern as to whether a
a nameplate rating of 20 MW or greater, on size or role.42 Therefore, we propose Reliability Standard that applies to a
or transmission facilities energized at to direct NERC to take such factors into regional reliability organization is
200 kV or greater.’’ 39 It explains that, account in determining applicability, as enforceable pursuant to section 215(e) of
‘‘to ensure that the standards are well as compliance requirements, for a the FPA, since it is not clear whether a
applied in a cost effective manner and particular Reliability Standard. regional reliability organization is a
the applicability of the standards is 52. In addition, the Commission user, owner or operator of the Bulk-
focused on entities having a material solicits comment on whether, despite Power System. NERC contends that
impact on reliability of the bulk power the existence of a threshold in a such Reliability Standards are
system, it is necessary in the future to particular standard (e.g., generators with enforceable, and identifies several legal
begin providing greater specificity in the a nameplate rating of 20 MW or over), theories to support its position.
applicability section of the the ERO or a Regional Entity should be Specifically, NERC contends that such
standards.’’ 40 NERC, as the ERO, permitted to include an otherwise Reliability Standards are enforceable
indicates that it plans to develop a set exempt facility, e.g., a 15 MW generator, because: (1) Each regional reliability
of guidelines on such limitations for the on a facility-by-facility basis, if it organization will voluntarily register as
standard drafting teams and to require determines that the facility is needed for a member of NERC and thereby be
that a new Reliability Standard or a Bulk-Power System reliability. If so, bound to comply; 44 (2) a regional
modification to an existing Reliability what if any process should the ERO or reliability organization performs
Standard, going forward, include this Regional Entity provide when making functions on behalf of its members that
degree of specificity. such a determination? are users, owners and operators of the
50. A number of commenters advocate 53. NERC has proposed registration of Bulk-Power System; and (3) NERC is in
that a mandatory Reliability Standard joint action agencies or similar the process of updating its functional
should not apply to entities that have no organizations that would register on model to provide a functional
‘‘material impact’’ on the Bulk-Power behalf of their members. APPA asks that description of a regional reliability
System.41 These commenters also ask NERC permit a joint action agency or organization that includes functions that
that the Commission encourage and similar organization to accept NERC believes are consistent with a
facilitate contractual arrangements for compliance responsibilities on a system operator. EEI and other
the delegation of compliance obligations standard-by-standard basis. We propose commenters question whether a
faced by small entities to Joint Action to direct NERC to develop procedures Reliability Standard can be enforced
Agencies (JAAs) and other organizations which permit a joint action agency or against a regional reliability
that have ongoing relationships with similar organization to accept organization.
NERC. compliance responsibility on behalf of 56. The Commission is not persuaded
51. While NERC has yet to submit a that a regional reliability organization’s
their members.
specific proposal, the Commission compliance with a Reliability Standard
agrees that it is important to examine 4. Regional Reliability Organizations can be enforced as proposed by NERC.
the impact a particular entity may have 54. NERC has proposed 28 Reliability Section 215 of the FPA does not appear
on the Bulk-Power System in Standards that would apply, in whole or to recognize a regional reliability
determining the applicability of a in part, to a regional reliability organization as a user, owner or
specific Reliability Standard. However, organization.43 Many of the 28 operator of the Bulk-Power System.
we do not believe that a ‘‘blanket Reliability Standards concern such Moreover, NERC’s arguments assume
waiver’’ approach that would exempt matters as data gathering, data base that each regional reliability
entities below a threshold level from maintenance, preparation of organization will voluntarily join as a
compliance with all Reliability assessments and other ‘‘process’’ related member of NERC and be legally bound
Standards would be appropriate because responsibilities. Others are what have as a member to comply. Further, NERC’s
there may be instances where a small been referred to as ‘‘fill-in-the-blank’’ claim that a regional reliability
entity’s compliance is critical to Reliability Standards. Many of the organization will perform functions on
reliability. For instance, the reporting of proposed Reliability Standards that behalf of its members that are users,
a sabotage event required by CIP–001– have compliance measures refer to the owners and operators of the Bulk-Power
0 may be important regardless of the regional reliability organization as a System does not establish a binding
size of the entity since such reporting compliance monitor. agency relationship that would create a
helps others by putting them on notice legal basis for requiring regional
of potential attacks to their own 42 For example, a dedicated phone line that reliability organization compliance with
systems. For purposes of assessing would remain operative during a power failure may Reliability Standards. While it is
compliance with a particular Reliability suffice for a small cooperative with minimal Bulk-
important that the existing regional
Standard, it may be appropriate to Power System facilities, while a large investor-
owned utility may need a sophisticated reliability organizations continue to
differentiate among certain subsets of communication system with redundancy and fulfill their current roles during the
users, owners, and operators. For diverse routing requirements. transition to a regime where Reliability
example, the requirement to have 43 NERC states that the regional reliability
Standards are mandatory and
adequate communications capabilities organizations are the same as the existing eight
enforceable, we do not understand why,
to address real-time emergency regional reliability councils and that ‘‘a regional
reliability organization may or may not be the same once the transition is complete, a
conditions (COM–001–0 and COM– organization that is providing statutory functions regional reliability organization should
002–1) may be necessary for all
delegated by agreement with a regional entity.’’ play a role separate from a Regional
applicable entities regardless of size or NERC Comments at 101. In the order certifying
Entity whose function and
role, although we understand that the NERC as the ERO, the Commission asked that NERC
provide additional information regarding the
possible ongoing role of the regional reliability 44 Pursuant to NERC’s ERO application, a member
39 NERC Petition at 9. organizations and their relationship with Regional ‘‘accepts the responsibility to promote, support, and
40 Id. at 82.
Entities. ERO Certification Order, 116 FERC comply with the Bylaws, Rules of Procedure, and
41 See, e.g., Alcoa, APPA, BPA and TAPS. ¶ 61,062, at P 76. Reliability Standards * * *.’’
responsibility is explicitly recognized that references a regional reliability electricity. The NERC glossary, in
by section 215 of the FPA. We seek organization as a compliance monitor be contrast, states that Reliability
comment on whether there is any need modified to refer to the ERO as the Standards apply to the ‘‘bulk electric
to maintain separate roles for regional compliance monitor. system,’’ which is defined in terms of a
reliability organizations with regard to 59. Finally, for the remaining seven voltage threshold, as follows:
establishing and enforcing Reliability Reliability Standards (fill-in-the-blank As defined by the Regional Reliability
Standards under section 215. standards),49 we propose to request Organization, the electrical generation
57. At present, 28 of the proposed additional information on these resources, transmission lines,
Reliability Standards are written to proposed Reliability Standards pending interconnections with neighboring systems,
apply solely or partially to regional receipt of additional information, as and associated equipment, generally operated
reliability organizations.45 We do not detailed below in the discussion on fill- at voltages of 100 kV or higher. Radial
believe it is necessary or useful to in-the-blank standards. transmission facilities serving only load with
remand those Reliability Standards one transmission source are generally not
simply because they refer to the regional 5. Bulk-Power System v. Bulk Electric included in this definition.52
reliability organization. For the five System 63. While NERC’s definition generally
standards that apply partially to 60. As noted above, Commission- excludes transmission facilities
regional reliability organizations, the approved Reliability Standards are to operated below 100 kV, NERC allows
Commission proposes action similar to provide for the Reliable Operation of the each regional reliability organization to
other Reliability Standards that need Bulk-Power System. Generally speaking, add specificity to this general
improvement, i.e., to approve them and the Nation’s Bulk-Power System has obligation.
direct modification.46 For the other been described as consisting of 64. The Staff Preliminary Assessment
Reliability Standards, as an interim ‘‘generating units, transmission lines expressed concern that differences
measure, we propose to direct the ERO and substations, and system between the statutory definition of Bulk-
to use its authority pursuant to § 39.2(d) controls.’’ 50 The transmission system Power System and NERC’s definition of
of our regulations to require users, component of the Bulk-Power System is bulk electric system create a
owners, and operators to provide to the understood to provide for the movement discrepancy that could result in
regional reliability organizations the of power in bulk to points of reliability gaps.53 Staff also expressed
information 47 related to data gathering, distribution for allocation to retail concern that allowing a regional
data maintenance, reliability electricity customers. Essentially, reliability organization to define what
assessments and other ‘‘process’’-type whereas transmission lines and other facilities are included in the bulk
functions.48 We believe that this parts of the transmission system, electric system could result in
approach is necessary to ensure that including control facilities serve to conflicting definitions—potentially
there will be no ‘‘gap’’ during the transmit electricity in bulk form from subjecting or excluding similar facilities
transition from the current voluntary the generation sources to concentrated from compliance with the Reliability
reliability model to a mandatory system areas of retail customers, the Standards.
in which Reliability Standards are distribution system moves the 65. NERC recommends that, for the
enforced by the ERO and Regional electricity to where these retail initial approval of proposed Reliability
Entities. In the long run, we propose to customers consume it at a home or Standards, the continued use of NERC’s
make the Regional Entities responsible, business. definition of Bulk Electric System is
through delegation by the ERO, for the 61. Section 215(b)(1) of the FPA appropriate. In the longer term, NERC
functions currently performed by the provides that all users, owners and suggests that change may be appropriate
regional reliability organizations. As operators of the Bulk-Power System but that any global change at this
part of this change, the delegation must comply with Commission- juncture will affect many Reliability
agreements to the Regional Entities approved Reliability Standards. For Standards and is best achieved through
should be modified to bind the Regional purposes of section 215, the statute the Reliability Standards development
Entities to assume these duties and defines ‘‘Bulk-Power System’’ to mean: process. Some commenters emphasize
responsibility for noncompliance. In (A) Facilities and control systems
that all facilities necessary for Bulk-
addition, the Reliability Standards necessary for operating an interconnected Power System reliability must be
should be modified to apply through the electric energy transmission network (or any covered by the Reliability Standards,
Functional Model, to the users, owners portion thereof); and (B) electric energy from and none should be omitted by a
and operators of the Bulk-Power System generating facilities needed to maintain discretionary act of a regional reliability
that are responsible for providing transmission system reliability. The term organization. Many commenters,
information. does not include facilities used in the local however, state that these excluded
58. Further, the Commission proposes distribution of electric energy.51 transmission systems have not been the
to require that any Reliability Standard 62. Notably, the statutory definition of cause of any of the large blackouts and
Bulk-Power System does not establish therefore should not be considered as
45 BAL–002, EOP–004, EOP–007, FAC–003, IRO–
voltage threshold limits on applicable part of the Bulk-Power System.54
001, MOD–001, MOD–002, MOD–003, MOD–004,
MOD–005, MOD–008, MOD–009, MOD–011, MOD– transmission facilities or electric energy
013, MOD–014, MOD–015, MOD–016, MOD–024, from generating facilities. It does, 52 See NERC Petition, Exhibit A, NERC glossary
MOD–025, PRC–002, PRC–003, PRC–006, PRC–012, however explicitly exclude facilities at 2.
PRC–013, PRC–014, PRC–020, TPL–005, and TPL– 53 Staff Preliminary Assessment at 25–26. For
006.
used in the local distribution of example, the two 230 kV cables that connect
46 BAL–002, EOP–004, FAC–003, IRO–001, and Mirant’s Potomac River Plant and the 69 kV
49 MOD–001, MOD–002, MOD–003, MOD–004,

MOD–016. Three of these (EOP–004, FAC–003 and transmission facilities that supply portions of
MOD–016) are ‘‘data-gathering’’ or ‘‘process-type’’ MOD–005, MOD–008, and MOD–009. Washington, DC were not included in the MAAC
Reliability Standards. 50 Maintaining Reliability in a Competitive U.S. definition of bulk electric system. New York City’s
47 EOP–007, MOD–011, MOD–013, MOD–014, Electricity Industry, Final Report of the Task Force 138 kV system is not included in NPCC’s definition
MOD–015, MOD–024, MOD–025, PRC–002, PRC– on Electric System Reliability, Secretary of Energy of bulk electric system.
003, PRC–006, PRC–012, PRC–013, PRC–014, PRC– Advisory Board, U.S. Department of Energy 54 Staff review of selected Form No. 1 reports filed
020, TPL–005, and TPL–006. (September 1998) at 2, 6–7. with the Commission indicates that 25 percent or
48 18 CFR 39.2(d). 51 16 U.S.C. 824o(a)(1). more of many public utilities’ total transmission
Furthermore, some commenters, Reliability Standards, the continued use C. Mandatory Reliability Standards
including those representing small of NERC’s definition of bulk electric
1. Legal Standard for Approval of
transmission owners, prefer the system as set forth in the NERC glossary Reliability Standards
continued use of the NERC definition is appropriate.56 However, we interpret
and caution against simply replacing all the term ‘‘bulk electric system’’ to apply 72. Section 215(d)(2) of the FPA states
references to bulk electric system with to all of the ≥ 100 kV transmission that the Commission may approve a
Bulk-Power System because (1) the systems and any underlying Reliability Standard if it determines that
latter term as defined in section 215 of a Reliability Standard is just,
transmission system (< 100 kV) that
the FPA is ambiguous and (2) it would reasonable, not unduly discriminatory
could limit or supplement the operation
likely lead to an unintended substantive or preferential, and in the public
of the higher voltage transmission
change in various Reliability Standards. interest. In Order No. 672, the
systems. It would also include Commission addressed issues regarding
66. We believe that Congress intended transmission to all significant local
that the definitions of Bulk-Power the application of the statutory standard
distribution systems (but not the in our review of a proposed Reliability
System and Reliable Operation 55 in
distribution system itself), load centers, Standard. The Commission identified a
section 215 of the FPA to further the
objective of maintaining the reliability and transmission connecting generation series of factors it would consider when
of the entire Bulk-Power System, that supplies electric energy to the assessing whether to approve or remand
including maintaining the reliability of system. If there is a question concerning a Reliability Standard.57 Further, Order
all of the elements of the transmission which underlying transmission system No. 672 stated that the Commission
component of the Bulk-Power System. limits or supplements the operation of would, consistent with the statute, give
We believe that the transmission the higher voltage transmission system, ‘‘due weight’’ to the technical expertise
elements excluded under NERC’s bulk the Commission proposed that the ERO of the ERO with respect to the content
electric system approach, including would provide the final determination of a proposed Reliability Standard.
transmission that serves critical load on a case by case basis. However, due weight does not equate to
centers, are subject to the Commission’s 69. Continued reliance on multiple a rebuttable presumption that a
jurisdiction under section 215. regional interpretations of the NERC proposed Reliability Standard meets the
67. The term Bulk-Power System as statutory requirement of being just,
definition of bulk electric system, which
defined in section 215 of the FPA is one reasonable, not unduly discriminatory
omits significant portions of the
determinant of the Commission’s or preferential, and in the public
transmission system component of the
jurisdiction for reliability purposes (the interest.58 Further, the Commission
Bulk-Power System that serve critical review of a proposed Reliability
phrase ‘‘user, owner or operator’’ being load centers, is not appropriate. We
another). While we do not believe that Standard would balance any conflict
propose that NERC eventually revise the between a proposed Reliability Standard
it is appropriate to categorically exclude
current definition of bulk electric and competition on a case-by-case
any class of facilities from the definition
of Bulk-Power System, we recognize system to ensure that all facilities, basis.59
that a particular Reliability Standard control systems, and electric energy 73. NERC suggests that a proposed
may appropriately only need to apply to from generation resources that impact Reliability Standard that has been
a subset of facilities that comprise the system reliability are included within developed through its Reliability
Bulk-Power System. Thus, the the scope of applicability, and that Standards development process, which
Commission may approve a Reliability NERC’s revision is consistent with the has been certified by ANSI as being
Standard that applies to the bulk statutory term Bulk-Power System. open, inclusive, balanced and fair, is
electric system as defined by NERC 70. While the approach outlined assured to be ‘‘just, reasonable, and not
without limiting the ability of the ERO above may result initially in a unduly discriminatory or
to develop and propose standards preferential.’’ 60 NERC also proposes 10
Reliability Standard applying to a set of
applicable to the broader set of facilities ‘‘benchmarks’’ for evaluating a proposed
Bulk-Power System facilities that is less
encompassed by the statutory definition Reliability Standard that, according to
than that of the full reach of the
as may be necessary. NERC, ‘‘may be helpful’’ to the
Commission’s jurisdiction pursuant to Commission in determining whether a
68. The Commission believes that the section 215 of the FPA (the ‘‘gap’’ to
ERO has suggested a sensible transition Reliability Standard is ‘‘just, reasonable
which the Staff Preliminary Assessment and not unduly discriminatory or
approach. The Commission proposes referred), we agree with the commenters
that, for the initial approval of proposed preferential’’ if due process provided by
that a wholesale substitution of one the ANSI process alone does not
line miles operate below 100 kV. Yet such facilities
term for another could lead to suffice.61 In addition, NERC suggests
may well be as much a part of an entity’s portion unintended substantive changes within that the Commission should consider
of the nation’s integrated transmission system certain Reliability Standards. the benchmarks when determining
component of the Bulk-Power System as the
transmission facilities operating at or above 100 kV 71. The Commission solicits comment whether a proposed Reliability Standard
because these lower voltage facilities support the on this interpretation and whether the ‘‘is in the public interest.’’
higher voltage facilities. Indeed, it is not unusual Regional Entities should, in the future, 74. In Order No. 672, the Commission
to see outages of 69 kV transmission facilities rejected the notion that it would
limiting the higher voltage transmission facilities play a role in either defining the
with which they are networked. facilities that are subject to a Reliability 57 Order No. 672 at P 262, 321–37.
55 As mentioned earlier, ‘‘Reliable Operation
Standard or be allowed to determine an 58 Id. at P 345.
means operating the elements of the Bulk-Power
exception on a case-by-case basis.
59 Id. at P 378.
System within equipment and electric system
60 NERC Petition at 6–8.
thermal, voltage, and stability limits so that
instability, uncontrolled separation, or cascading 61 Id. at 9–12. The benchmarks are: Applicability;
failures of such system will not occur as a result purpose; performance requirements; measurability;
56 We note that the regional definitions have not
of sudden disturbance, including a Cybersecurity technical basis in engineering and operations;
Incident, or unanticipated failure of system been submitted to us and we are not determining completeness; consequences for noncompliance;
elements.’’ See Order No. 672 at P 64. See also 18 the appropriateness of any regional definition in clear language; practicality; and consistent
CFR 39.1. this proceeding. terminology.
presume that a proposed Reliability mandatory Reliability Standards and necessary or appropriate, but where the
Standard developed through an ANSI- present a ‘‘moving target’’ because proposed Reliability Standard
certified process automatically satisfies NERC has proposed a plan to modify nonetheless satisfies the statutory
the statutory standard of review.62 numerous proposed Reliability requirement that it be just, reasonable,
While an open and transparent process Standards before the Commission would not unduly discriminatory or
certainly is extremely important to the approve them in a final rule. preferential, and in the public interest.
overall success of implementing section 77. The Commission believes that This approach also allows us to give due
215 of the FPA, an evaluation of any conditional approval may be a useful weight to the technical expertise of the
proposed Reliability Standard must procedural tool that it may want to use ERO in approving a Reliability
focus primarily on matters of substance when reviewing a Reliability Standard Standard, yet also provides a
rather than procedure. We will, proposed at some future date. However, mechanism to have the Commission’s
therefore, review each Reliability after careful consideration, the concerns addressed. Thus, where
Standard in addition to the process Commission is not proposing to appropriate, we propose to approve
through which it was approved by conditionally approve any of the 107 these Reliability Standards as
NERC to ensure that the Reliability Reliability Standards currently before mandatory and enforceable, and direct
Standard is just, reasonable, not unduly us. Rather, as reflected in our modifications pursuant to section
discriminatory or preferential, and in substantive analysis of each Reliability 215(d)(5). For these Reliability
the public interest. Standard, we will propose one of four Standards, we provide guidance with
75. Likewise, with regard to NERC’s actions: regard to how and why they need to be
benchmarks, we will not constrain 78. Approve: Approval is appropriate improved and may establish a deadline
ourselves by approving or remanding a for a proposed Reliability Standard that by which a modification must be
proposed Reliability Standard based on the Commission determines to be ‘‘just, resubmitted to the Commission.
whether it satisfies the benchmarks. In reasonable, not unduly discriminatory 81. Request additional information:
our order certifying NERC as the ERO, or preferential, and in the public There are some Reliability Standards
we determined that the benchmarks and interest,’’ and as to which the that do not contain sufficient
other factors would be useful for the Commission has not identified any information to enable us to propose a
ERO in developing proposed Reliability additional issues that the ERO needs to disposition. For those Reliability
Standards.63 The Commission did not address at this time to improve the Standards, we will identify the
suggest that it would rely on the Reliability Standard. Mandatory information that we require, and
benchmarks in its review of a proposed compliance with the Reliability propose not to approve or remand these
Reliability Standard. Rather, as Standard would be required as of the Reliability Standards until all the
discussed above, Order No. 672 effective date of the Final Rule. The relevant information is received. For
identified factors that the Commission Commission has approved NERC’s plan example, many of the fill-in-the-blank
will consider when determining to review each Reliability Standard Reliability Standards will not be
whether a proposed Reliability Standard within five years from the effective date approved or remanded until the
satisfies the statutory requirements.64 of the standard or its latest revision. Commission has received all the
79. Approve as mandatory and necessary information. We may set a
2. Commission Options When Acting on enforceable; and direct modification deadline by which NERC must submit
a Reliability Standard pursuant to section 215(d)(5): The the necessary information.
76. NERC recommends that the Commission would take two separate 82. Remand: Remand is appropriate
Commission ‘‘conditionally approve’’ and distinct actions under the statute. for a proposed Reliability Standard that
First, pursuant to section 215(d)(2) of does not satisfy the statutory criteria
certain proposed Reliability Standards
the FPA, the Commission would that it be ‘‘just, reasonable, not unduly
that it believes satisfy the statutory
approve a proposed Reliability discriminatory or preferential, and in
requirement but require improvement.65
Standard, which would be mandatory the public interest.’’ The Commission
The concept of conditional approval of
and enforceable upon the effective date may choose to set a deadline for NERC
a Reliability Standard was discussed at
of the Final Rule. Second, the to submit a modified Reliability
length in the July 6, 2006 technical
Commission would direct NERC to Standard.68 In the interim, the
conference.66 Many commenters
submit a modification of the Reliability remanded standard would not be
responding to the Staff Preliminary
Standard to address specific issues or mandatory and enforceable. The
Assessment support some form of
concerns identified by the Commission Commission will not hesitate to remand
conditional approval, while others
pursuant to section 215(d)(5) of the a Reliability Standard that it finds does
oppose the concept out of concern that not provide for an adequate level of
conditional approval will further FPA.67
80. This option is appropriate for a reliability.69
complicate the understanding of
large number of proposed Reliability 3. Prioritizing Modifications to
62 Order No. 672 at P 338. Standards where the Commission has Reliability Standards
63 ERO Certification Order, 116 FERC ¶ 61,062, at identified improvements which are
P 241.
83. As discussed above, the
64 Order No. 672 at P 262, 321–37. 67 See ERO Certification Order at P 233, where the
Commission is proposing to approve
65 See NERC Petition at 109; NERC Comments at
Commission also noted that, if a Reliability certain Reliability Standards and, as a
14–19. Standard is inadequate or has unintended separate action, is proposing to direct
66 July 6, 2006 technical conference, Tr. at 14–47. consequences, it may order the ERO to submit a the ERO to modify many of the same
According to NERC, conditional approval means modification pursuant to section 215(d)(5) of the Reliability Standards pursuant to
that the Commission would approve the Reliability FPA, 16 U.S.C. 824o(d)(5), which provides that
Standards as mandatory and enforceable. In ‘‘[t]he Commission * * * may order the Electric section 215(d)(5) of the FPA. The
enforcing conditional standards, NERC and the Reliability Organization to submit to the
Regional Entities would factor into the Commission a proposed reliability standard or 68 See 18 CFR 39.5(g) (‘‘[t]he Commission, when
determination of violations and the imposition of modification to a reliability standard that addresses remanding a Reliability Standard * * * may order
penalties that certain requirements may be regional a specific matter if the Commission considers such a deadline by which the [ERO] must submit a * * *
‘‘fill-in-the-blank’’ requirements or may be missing a new or modified reliability standard appropriate modified Reliability Standard’’).
compliance information. to carry out this section.’’ 69 Order No. 672 at P 329.
Commission recognizes that it is not would be appropriate for the ERO to Standards may interfere with mandatory
reasonable to expect the modification of resubmit as high priority items, we and enforceable Reliability Standards
such a substantial number of Reliability believe that it is important that the ERO being in effect by next summer.
Standards in a short period of time. develop a detailed, comprehensive work Moreover, the proposed Reliability
Rather, the ERO will have to set plan to address all of the modifications Standards have already been in effect
priorities regarding the order and timing that are directed pursuant to a final rule. for a substantial period of time on a
for developing modified Reliability The work plan should take a staggered voluntary basis. Thus, the Commission
Standards and resubmitting them to the approach and complete all the proposed proposes to eliminate a formal trial
Commission. modifications either within two or three period. Entities that have complied with
84. Many commenters recognize the years from the effective date of the final NERC’s standards on a voluntary basis
need for NERC to identify priorities in rule. should be familiar with the proposed
terms of which Reliability Standards are 88. The Commission believes that this mandatory Reliability Standards and
most critical to reliability and should be proposal strikes a reasonable balance what is required for compliance.
revised immediately, and which are of between the need to timely implement Therefore, an extensive trial period is
lesser priority. A number of identified improvements to the existing unnecessary for such entities.
commenters, including WIRAB, suggest Reliability Standards that will further 93. The Commission recognizes that
detailed plans on how to set such Bulk-Power System reliability and the there are entities that have not
priorities, focusing primarily on need for the ERO to develop historically participated in the
identifying those Reliability Standards modifications with industry input using voluntary system (including some
that are most critical to maintaining its open, stakeholder process. The relatively small entities) that may not be
reliability and those that are closest to Commission may use its authority, familiar with the proposed mandatory
being ready for implementation. pursuant to § 39.5(g) of the Reliability Standards and what is
Commenters suggest a staggered Commission’s regulations, to set a required for compliance. For such
schedule, some suggesting several years deadline for the ERO to submit a entities, we propose that the ERO and
for completion. modified Reliability Standard if the Regional Entities use their enforcement
85. We propose that NERC first focus Commission is not satisfied with the discretion in imposing penalties on
its resources on modifying those time frame proposed by the ERO work such entities for the first six months the
Reliability Standards that have the plan. Reliability Standards are in effect.
largest impact on near term Bulk-Power 89. The Commission solicits comment However, the Commission, the ERO,
System reliability. Many of the on its prioritization proposal. and the Regional Entities would still
proposed modifications that reflect retain the authority to impose penalties
Blackout Report recommendations fit 4. Trial Period on such entities if warranted by the
this description and should be a high 90. A number of commenters favor a circumstances.
priority. The Commission has identified phase-in of Reliability Standards with a
a group of Reliability Standards that it 5. International Coordination of
trial period, during which Reliability
believes should be given the highest Remands
Standards would be mandatory, but no
priority by the ERO based on the above penalties would be assessed.71 Various 94. Canadian commenters, such as the
guidance.70 However, this is not meant commenters suggest that the trial period FPT Group, Alberta, CEA and Ontario
to be an exclusive or inflexible list and should last for a range of six months to IESO, request that the Commission
ERO and commenter input is welcome. five years. affirm that it will seek to coordinate
We propose that NERC address the 91. NERC, in its application for ERO with authorities in Canada prior to any
modifications we propose for these high certification, proposed a six month exercise of conditional approval,
priority Reliability Standards within 1 ‘‘notice period’’ during which NERC remand or rejection of a proposed
year of the effective date of the Final would determine ‘‘financial’’ penalties Reliability Standard; and that each
Rule. and provide notice of the penalties to existing NERC standard will retain its
86. In addition, we propose that NERC violating entities, but would not collect present applicability until such time as
address certain Reliability Standards any penalties. NERC stated that it would the Commission approves it as a
that are not necessarily identified above submit a report on the effectiveness of mandatory Reliability Standard.
as ‘‘high priority’’ may be modified in the revised Sanction Guidelines to the 95. The Commission has recognized
a relatively short time frame where the Commission by May 31, 2007. In the the importance of international
proposed modifications are relatively ERO Certification Order, the coordination in both Order No. 672 73
minor or ‘‘administrative’’ in nature. We Commission rejected requests to and the ERO Certification Order.74 In
believe that the ERO may complete such lengthen NERC’s proposed six-month the latter order, the Commission
modifications relatively quickly with ‘‘notice period’’ because it directed NERC to revise its proposed
little diversion of ERO resources. Such ‘‘appropriately balances the time needed coordination process to: (1) Identify the
modifications may include a proposal to for NERC to implement the Sanction relevant regulatory bodies and their
modify a Reliability Standard to: (1) Guidelines with the countervailing respective standards approval and
Identify the ERO as the compliance interest in activating the mandatory remand processes that will be
monitor rather than the regional Compliance Enforcement program as implicated in any remand of a proposed
reliability organization; (2) include rapidly as possible.’’ 72 standard; and (2) specify actual steps to
Measures and Levels of Non- 92. The Commission, however, is coordinate all of these processing
compliance; or (3) require other increasingly concerned that a trial requirements, including those that may
relatively minor clarifications or
period that commences with the be necessary to expedite processing a

modifications. effective date of mandatory Reliability proposed Reliability Standard that must
87. While the Commission has be remanded. The Commission believes
identified some modifications to 71 See, e.g., Alberta, APPA, ISO/RTO Council,
Reliability Standards that it believes PSEG, WIRAB and WECC. 73 See Order No. 672 at P 400.
72 ERO Certification Order, 116 FERC ¶ 61,062, at 74 ERO Certification Order, 116 FERC ¶ 61,062, at
70 See Appendix D (High Priority List). P 462. P 286.
that NERC’s development of a address key issues for assuring Bulk- Standards pertaining to the Bulk-Power
coordination process, together with Power System reliability. The Blackout System.
existing means of communication and Report recommendations were 102. Accordingly, the Commission
coordination such as the U.S.—Canada developed by and have received expects the ERO to include proactive
Bilateral Electric Reliability Oversight international support from both Requirements in the Reliability
Group, will provide the necessary industry and regulators in the United Standards in addition to Requirements
mechanisms for international States and Canada and we believe they that identify a specific outcome.
coordination. represent a well-reasoned and sound 2. Measures and Levels of Non-
D. Common Issues Pertaining to basis for action. Further, the Blackout Compliance
Reliability Standards Report recommendations address issues
that caused or contributed to not only 103. As noted above, the uniform
96. As explained in the Staff the August 2003 blackout, but multiple format that NERC employs for each of
Preliminary Assessment,75 certain blackouts over the past 20 years.76 Thus, its proposed Reliability Standards
issues are common to a number of in the discussion of a particular reflects five organizational elements:
proposed Reliability Standards. proposed Reliability Standard, we often Introduction, Requirements, Measures,
Immediately below, we discuss these will recognize the merit of a specific Compliance, and Regional Differences.
common issues, followed by a Blackout Report recommendation and The Staff Preliminary Assessment stated
discussion and determination of each reaffirm the reasoning behind such that 26 of the proposed Reliability
individual proposed Reliability recommendation in proposing to Standards do not contain Measures 78 or
Standard. approve with a directive to modify a Levels of Non-Compliance,79 or both.
1. Blackout Report Recommendations specific Reliability Standard. Further, The Staff Preliminary Assessment
we believe that a modification to a emphasized that Reliability Standards
97. As explained in the Staff would be less subject to variable
Preliminary Assessment, the Blackout proposed Reliability Standard that was
recommended in the Blackout Report implementation if they included the use
Report identified a number of factors of performance metrics, where
common to eight major blackouts should receive the highest priority in
terms of NERC’s workplan to address applicable. The Staff Preliminary
experienced in North America since Assessment assumed that metrics used
1965 and made 46 specific identified deficiencies.
100. The Commission believes that to determine non-compliance would be
recommendations to improve reliability included in the Measures similar to
based on the lessons learned from the prudent policy for Bulk-Power System
reliability is to have Reliability BAL–001. NERC subsequently clarified
August 2003 blackout and previous that such metrics are not intended to be
blackouts. These included specific Standards that are proactive. Such
Reliability Standards would require part of the Measure, but rather in the
recommendations to modify certain Requirements.80
existing Reliability Standards. While actions be taken to prevent a blackout or
outage and not simply address the 104. NERC, in its Petition, identified
recognizing the progress NERC has 21 Reliability Standards that lack
made, the Staff Preliminary Assessment undesirable outcomes. Therefore, it
must first and foremost address the Measures or Levels of Non-Compliance
also expressed concern that the and indicated that it plans to file
proposed Reliability Standards continue critical steps or actions that determine
the achievement of the outcome. This modified Reliability Standards that
to reflect several of the deficiencies include the missing Measures and
identified by the Blackout Report. proactive approach is necessary to
ensure that the responsible entity is Levels of Non-Compliance in November
98. In its comments, NERC 2006. Further, NERC contends that a
emphasizes that implementation of the aware of and performs all of the
necessary steps to achieve the ultimate Reliability Standard lacking Measures or
Blackout Report recommendations has Levels of Non-Compliance is still
been its top priority since August 2003 reliability goal, rather than reacting to
the implications of not achieving the enforceable because the Measures
and describes the progress it has made should be viewed as the process to
in addressing specific recommendations outcome.
determine non-compliance during
and the status of ongoing work. It states 101. Our concern is illustrated by an
audits and investigations. According to
that some of the hardest work on issues analogy provided by NERC in regard to
NERC, the ‘‘Requirements’’ within a
such as relay loadability and reactive commercial airline maintenance.77 A
Reliability Standard define what an
power require extensive investigation purely outcome-based standard on entity must do to be compliant and
before standards can be drafted. Other maintenance would require zero plane establish an enforceable obligation, and
commenters suggest that the Blackout crashes due to failure of airplane the presence or absence of Measures or
Report recommendations provide useful components. But the public interest Levels of Non-Compliance should not
direction for areas where the Reliability would not be well served if this were be the sole determining factor as to
Standards require modification and for the only standard because the whether a Reliability Standard meets
setting priorities when determining consequences of failing to meet the the statutory test for approval. Several
which Reliability Standards to modify standard are immediate and
first. A few commenters ‘‘downplayed’’ unacceptable and provides no guidance 78 Although NERC does not formally define
the significance of the Blackout Report, on how to achieve the goal. The public ‘‘Measures,’’ NERC explains that they ‘‘are the
noting that there is no statutory basis to interest dictates that there should be evidence that must be presented to show
accept all the Task Force’s standards on maintenance procedures, compliance’’ with a standard and ‘‘are not intended
to contain the quantitative metrics for determining
recommendations as absolute, infallible frequency of testing and qualifications satisfactory performance.’’ NERC Comments at 104.
requirements and that not all of personnel conducting the
79 ‘‘Levels of Non-Compliance’’ are established
recommendations translate into maintenance—not just a requirement criteria for determining the severity of non-
Reliability Standards. that there be no accidents. This same compliance with a Reliability Standard. The levels
concept applies to mandatory Reliability of non-compliance range from Level 1 to Level 4,
99. The Commission believes that the with Level 4 being the most severe.
Blackout Report recommendations 80 See NERC Comments at 105 (‘‘Metrics of
76 Blackout Report at Chapter 10. satisfactory performance are defined in the
75 See Staff Preliminary Assessment at 17–26. 77 NERC Comments at 40. requirements. * * *’’).
commenters take the opposite view, proposed by NERC are sufficient to are pleased that the ERO intends to
contending that Measures and Levels of foster effective enforcement.83 The review each Reliability Standard to
Non-Compliance are necessary to ensure Commission also seeks comment on identify and address ambiguous
that a Reliability Standard is sufficiently what, if any, additional records Measures and Levels of Non-
clear to be fairly enforced.81 retention requirements should be Compliance language. While this is
105. We agree that it is important to established for the proposed Reliability important, it is essential that the
have Measures and Levels of Non- Standards. Requirements for each Reliability
Compliance specified for each Standard, in particular, are sufficiently
Reliability Standard, and recognize that 3. Ambiguities and Potential Multiple clear and not subject to multiple
NERC has plans to provide many of Interpretations interpretations. Where the Requirements
these elements in a November 2006 108. The Staff Preliminary portion of a Reliability Standard is
filing. However, the absence of these Assessment indicated that ‘‘various sufficiently clear (and no other issues
two elements, which describe elements of numerous standards appear have been identified), we propose to
approaches that will be used to assess to be subject to multiple interpretations, approve the Reliability Standard.
non-compliance, including the severity especially with regard to the lack of 111. In other cases, where some
of a violation for penalty setting- specificity in the standards’ ambiguity may exist but there is also a
purposes, is not critical to our requirements, measurability, and common interpretation for certain terms
determination of whether to approve a degrees of compliance.’’ 84 NERC agrees based on the best practices within the
proposed Reliability Standard. The most that there are many areas in which the industry, we propose to adopt that
critical element of a Reliability Standard Reliability Standards can be further interpretation in the NOPR. For
is the Requirements. As NERC explains, improved and states that it is committed purposes of enforcement, the
‘‘the Requirements within a standard to review each Reliability Standard in Commission proposes to implement any
define what an entity must do to be the next few years, based on priorities approved Reliability Standard
compliant * * * [and] binds an entity coordinated with the Commission and consistent with our interpretation of any
to certain obligations of performance applicable authorities in Canada.85 ambiguity as explained in the final rule.
under section 215 of the FPA.’’ 82 If NERC adds that, while there are In some cases, we propose to direct
properly drafted, a Reliability Standard opportunities for improvement, the NERC to supplement the language
may be enforced in the absence of existing Reliability Standards contain pursuant to section 215(d)(5) of the
specified Measures or Levels of Non- the degree of clarity and specificity FPA.
Compliance. required to meet the statutory test for 112. In summary, the Commission
106. While Measures and Levels of approval. believes that a proposed Reliability
Non-Compliance provide useful 109. Many commenters agree Standard that has Requirements that are
guidance to the industry, compliance generally that ambiguities must be so ambiguous as to not be enforceable
will in all cases be measured by removed and mandatory Reliability should be remanded. A Reliability
determining whether a party met or Standards must be sufficiently clear Standard that has sufficiently clear
failed to meet the Requirement under with regard to who is responsible and Requirements, Measures, and
the specific facts and circumstances of what an entity must do to achieve Compliance language and is otherwise
its use, ownership or operation of the compliance.86 Some commenters insist just and reasonable should be approved.
Bulk-Power System. Therefore, we that a Reliability Standard should not go A proposed Reliability Standard that
propose to approve a Reliability into effect until this is achieved. WECC has sufficiently clear and enforceable
Standard that lacks Measures or Levels and LPPC recommend that the Requirements but Measures or Levels of
of Non-Compliance, or where these Commission require NERC to institute a Non-Compliance that are ambiguous (or
elements contain ambiguities, provided quality assurance program to ensure that none at all) should be approved in some
that the Requirement is sufficiently Reliability Standards are clear, concise, cases with a directive that the ERO
clear and enforceable. Where a and non-redundant. develop clear and objective Measures
Reliability Standard will be improved 110. Our review of the Reliability and Compliance language.
by providing missing Measures or Standards has confirmed staff’s concern 4. Technical Adequacy
Levels of Non-Compliance or by regarding the degree of ambiguity
clarifying ambiguities with respect to contained in certain Measures and 113. The Staff Preliminary
Measures or Levels of Non-Compliance, Levels of Non-compliance portions of Assessment stated that the
we propose to approve the Reliability the proposed Reliability Standards. We Requirements specified in certain
Standard and concurrently direct NERC Reliability Standards may not be
to modify the Reliability Standard 83 Notably, the Commission elsewhere imposes sufficient to ensure an adequate level of
accordingly. records retention requirements to facilitate effective reliability.87 Staff explained that, while
107. The common format of NERC’s enforcement. For example, in Order No. 677, FERC Order No. 672 noted that the ‘‘best
Stats. & Regs. 31,218 (2006), the Commission practice’’ may be an inappropriately
proposed Reliability Standards calls for amended 18 CFR parts 35 and 284 by extending
a ‘‘data retention’’ metric, generally in certain sellers’ record retention requirement from
high standard, it also warned that a
the ‘‘Compliance’’ section of the three to five years so as to bring the record retention ‘‘lowest common denominator’’
Reliability Standard. Yet, some requirement in line with the five year limitations approach is unacceptable if it is
period applicable where the Commission might insufficient to ensure system reliability.
proposed Reliability Standards do not seek to impose civil penalties for violations of the
contain a data retention requirement or anti-manipulation rule, 18 CFR part 1c. In the
114. NERC, EEI and others state that
state positively that no record retention reliability context, the civil penalty statute of NERC’s proposed Reliability Standards
limitations period for both the Commission and are technically sound and that
period applies. The Commission seeks

ERO and Regional Entities will also be five years. compliance with them will assure
comment on whether the retention time See Order No. 672 at P 487.
periods specified in various Standards 84 Staff Preliminary Assessment at 18–19.
reliability. NERC contends that each
85 NERC Petition at 90–91; NERC Comments at
proposed Reliability Standard meets the
81 See, e.g., National Grid and BPA. 101–02. statutory test of providing an adequate
82 NERC Comments at 104. See also NERC 86 See, e.g., LPPC, MISO, NEMA, SDG&E and
Petition at 83. WECC. 87 Staff Preliminary Assessment at 19.
level of reliability for the Bulk-Power first category did not pose a problem recommends conditional approval of
System. Others share staff’s concern that because they were enforceable as these 29 remaining fill-in-the-blank
Reliability Standards not represent the written. The issue with the remaining standards.
lowest common denominator.88 One 25 Reliability Standards was whether 119. Some commenters raised
commenter suggested that there is a they could be enforced given that the concerns that the fill-in-the-blank
tendency for a standard drafting team to regional criteria and procedures were standards undermine uniformity, and
adopt a lowest common denominator not developed through an ERO- may exacerbate differences or seams
approach to achieve a consensus on a approved process and were not between the various ISO and RTO
standard. submitted to the Commission for control areas. Several commenters
115. We are cautious about drawing approval. NERC acknowledged that the support limited use of fill-in-the-blank
any general conclusions about technical 25 fill-in-the blank Reliability Standards standards, noting that they provide
adequacy as we consider this a matter in categories two and three required flexibility, which may facilitate
that can only be addressed on a further evaluation and proposed development of a Reliability Standard in
standard-by-standard basis. While we providing a work plan to the instances where a continent-wide
are required under the statute to accord Commission by November 8, 2006 with approach may not work.
due weight to the technical expertise of a timetable for modifying, replacing, or 120. NERC represents that it will
the ERO, we are still required to withdrawing these standards.93 submit an action plan and schedule in
independently assess the technical 117. The Staff Preliminary November 2006 for completing the fill-
adequacy of any proposed Reliability Assessment recognized that the fill-in- in-the-blank standards. NERC expects
Standard. Where we have specific the-blank standards raise two principal that it will take approximately three
concerns regarding whether a concerns: (i) Some are not enforceable years to complete the process, and will
Requirement set forth in a proposed against users, owners, and operators of be prioritizing Reliability Standards that
Reliability Standard may not be the Bulk-Power System, but rather only require the most immediate revision.96
sufficient to ensure an adequate level of provide broad direction to regional NERC anticipates three potential
reliability or represents a ‘‘lowest reliability organizations, and (ii) the approaches to the fill-in-the-blank
common denominator’’ approach, we specific implementing standards standards: (1) If NERC determines that
address those concerns in the context of adopted by the regional reliability there is insufficient justification for a
that particular Reliability Standard. organizations have not undergone an regional difference, it may replace a
approval process under section 215 and, Reliability Standard with a uniform
5. Fill-in-the-Blank Standards continent-wide Reliability Standard; (2)
thus cannot be enforced by the
116. Certain Reliability Standards Commission or the ERO. where a regional difference is justified,
developed by NERC require the regional 118. In its June 26, 2006 comments to NERC proposes to direct the regions to
reliability organizations to develop the Staff Preliminary Assessment, NERC develop their regional criteria as a
criteria for use by users, owners, or amended its approach to the fill-in-the- Reliability Standard to be filed for
operators within the region. NERC refers blank standards. It recommends approval with the ERO and thereafter
to these as ‘‘fill-in-the-blank unconditional approval of the ‘‘category with the Commission and applicable
standards.’’ 89 NERC originally proposed one’’ Reliability Standards, which place authorities in Canada; (3) if mandatory
39 fill-in-the-blank standards, which it a requirement on a regional reliability enforcement of a fill-in-the-blank
said fell into three categories. The first organization to set criteria or procedures standard is not necessary for reliability,
14 were Reliability Standards that for reliability in the region, claiming NERC proposes to retire the Reliability
require a regional reliability that they are really not fill-in-the-blank Standard and allow a region to maintain
organization to set regional criteria or standards. NERC then proposes to voluntary criteria and procedures as
develop a regional procedure.90 The divide the remaining fill-in-the-blank needed.
second group contained 10 Reliability standards into two new groups, the first 121. We share commenters’ concerns
Standards that require the regional group consisting of 26 Reliability regarding the potential for the fill-in-
reliability organization to develop such Standards.94 The remaining group the-blank standards to undermine
criteria or procedures, and also require consists of three fill-in-the-blank uniformity. Order No. 672 stated that,
entities within the region to follow standards that also are missing measures while uniformity is the goal with
those procedures or criteria.91 The third or compliance elements.95 NERC respect to Reliability Standards, it may
category consisted of 15 Reliability not be achievable overnight. Where
Standards that require users, owners, 93 NERC Petition at 89. NERC had directed the regions to
and operators to follow criteria or 94 This group includes 24 of the 25 standards develop a particular Reliability
procedures developed by the regional originally included in categories two and three, Standard, we noted that ‘‘[o]ver time,
plus two additional standards not originally
reliability organization, but did not (in designated as fill-in-the-blank standards: BAL–002– we would expect that the regional
the same Reliability Standard) require 0, EOP–009–0, FAC–001–0, FAC–002–0, FAC–004– differences produced under this
the development of such criteria or 0, MOD–001–0, MOD–002–0, MOD–004–0, MOD– framework will decline and a set of best
procedures.92 NERC indicated that the 005–0, MOD–008–0, MOD–009–0, MOD–010–0, practices will develop.’’ 97 NERC’s
MOD–012–0, MOD–017–0, MOD–019–9, MOD–
024–1, MOD–025–1, PER–002–0, PRC–004–1, PRC– review states it will take uniformity
88 See,e.g., NPCC, SDG&E and NYSRC. 007–0, RPC–008–0, PRC–009–0, PRC–015–0, PRC– concerns into consideration, only
89 SeeNERC Petition at 87–90. 016–0, TPL–002–0,* and TPL–004–0.* (* Newly permitting regional differences where
90 EOP–007, IRO–001, MOD–003, MOD–011,
identified as fill-in-the-blank standards.) justified. In Order No. 672, we specified
MOD–013, MOD–014, MOD–015, MOD–016, PRC– 95 EOP–004–0, EOP–006–0,* and IRO–005–1.*
002, PRC–003, PRC–006, PRC–012, PRC–013, and (* Newly identified as fill-in-the-blank standards.)
two instances where regional
differences may be permitted: regional
PRC–014. NERC proposes that these 3 standards, along with

91 BAL–002, EOP–004, MOD–001, MOD–002,
23 others that are missing measures or compliance differences that are more stringent than
MOD–004, MOD–005, MOD–008, MOD–009, MOD– elements be conditionally approved with the the continent-wide Reliability Standard,
024, and MOD–025. understanding that the missing measures and
92 EOP–009, FAC–001, FAC–002, FAC–004, compliance information will be filed in November
including those addressing matters not
MOD–010, MOD–012, MOD–017, MOD–019, PER– 2006, after completion of stakeholder balloting in
96 NERC Comments at 107.
002, PRC–004, PRC–007, PRC–008, PRC–009, PRC– September and NERC board voting on November 1,
015, and PRC–016. 2006. 97 Order No. 672 at P 292.
addressed by a continent-wide 1. BAL: Resource and Demand redundant Requirements identified by

Reliability Standard, and regional Balancing LPPC within the applicable Reliability
differences necessitated by a physical a. Overview of Category Standards below.
difference in the Bulk-Power System.98 129. With respect to CenterPoint’s
NERC’s review must be consistent with 125. The six Balancing (BAL)
Reliability Standards address balancing comment, the Commission believes
these criteria. there are certain processes, such as the
122. In addition, if after an resources and demand to maintain
interconnection frequency within methods for calculating frequency bias,
appropriate review, NERC determines which are accepted industry practices
that regional differences are still prescribed limits.
and should be included as uniform
warranted, we propose that any regional i. General Comments requirements in the Reliability
proposal to fill-in-the-blank must be 126. LPPC comments generally that Standards. The Commission proposes to
developed in accordance with the each Requirement contained in a formalize the process across the regions.
NERC’s ANSI-approved process, or Reliability Standard must be measurable This will protect reliability by providing
through an alternative process approved to be mandatory. In this regard, LPPC a common basis for analysis and
by the ERO,99 and must be submitted to identifies examples of Requirements in corrective actions. CenterPoint also
the ERO and the Commission for the BAL Standards that it claims are not comments that ‘‘some of the process-
approval. measurable requirements but, rather, oriented standards should be
123. We propose to require descriptive or explanatory statements. eliminated,’’ but because CenterPoint
supplemental information regarding any LPPC also identifies several provided no further detail on this point,
Reliability Standard that requires a Requirements in the BAL Standards that the Commission is unable to fully
regional reliability organization to fill in it claims are redundant to other consider and respond to the comment.
missing criteria or procedures. Where Requirements in the BAL Standards.
important information has not been b. Real Power Balancing Control
127. CenterPoint comments that Performance (BAL–001–0)
provided to us to enable us to complete significant regional variation ‘‘is
our review, we are not in a position to necessary in matters such as amount i. NERC Proposal
approve those Reliability Standards. and composition of spinning reserve
Therefore, we propose to not approve or 130. The purpose of this Reliability
and calculation of the Frequency Bias
remand those Reliability Standards until Standard is to maintain Interconnection
component of ACE due to the different
all the necessary information has been steady-state frequency within defined
operating characteristics of the
provided. limits by balancing real power demand
regions.’’ 100 CenterPoint suggests that
and supply in real-time. BAL–001–0
E. Discussion of Each Individual customers’ concerns are focused on
establishes two requirements that are
Reliability Standard ensuring that a Reliability Standard’s
used to assess the proficiency of a
performance requirements are met as
124. We have reviewed each of the balancing authority to maintain
opposed to concerns about specifically
proposed Reliability Standards, and our interconnection frequency by balancing
how these requirements are met.
analysis is by chapter according to the real power (MW) demand, interchange,
CenterPoint indicates that regional
categories of Reliability Standards and supply. The proposed Reliability
variation in the method to comply with
defined in NERC’s petition. Each Standard would apply to balancing
the Reliability Standard is acceptable so
chapter begins with an introduction to authorities.
long as the Reliability Standard’s
the category, followed by a discussion of required level of performance is ii. Staff Preliminary Assessment
each proposed Reliability Standard. The ultimately achieved. CenterPoint
discussion includes summaries of suggests that certain process-oriented 131. Staff commented that
NERC’s proposal, the Staff Preliminary Reliability Standards in this group BAL–001–0 provides a good example of
Assessment, and comments received, as should be eliminated because other BAL performance metrics useful for assessing
well as a Commission proposal. The Reliability Standards already include the performance of Balancing
Commission proposal for each standard metrics necessary to determine Authorities and compliance with the
will include a proposed disposition. For compliance. standard.
Reliability Standards that are proposed
ii. Commission Response iii. Comments
to be approved with direction that
NERC modify the Reliability Standard, 128. With respect to LPPC’s general 132. ReliabilityFirst agrees with staff’s
specific instructions are provided comments, the Commission agrees that comments, and ISO/RTO Council
regarding areas that need to be Reliability Standards must have clear recommends that the Commission
modified, and how they should be and enforceable Requirements. LPPC accept this Reliability Standard.
modified. Where additional information correctly identifies a number of
is needed in order for the Commission 133. LPPC asserts that Requirements
instances in the BAL Reliability
to propose a disposition, the R1 and R2 are not actual Requirements
Standards where a Requirement appears
information required will be detailed. but instead only determine whether the
to entirely consist of, or contain, an
balancing authority has adequate
explanatory statement rather than an
regulating reserves, without specifying a
98 Id. at P 291. Our position was reiterated in the actionable Requirement. While the
ERO Certification Order where we directed NERC performance metric.
Commission agrees with LPPC that
to delete additional criteria contained in its Rules
of Procedure and Reliability Standard development
explanatory statements should not be in iv. Commission Proposal
the Requirements section of a Reliability
procedures. ERO Certification Order, 116 FERC

¶ 61,062, at P 274. Standard, the presence of an 134. The Commission disagrees with
99 NERC Rule of Procedure section 312.4 states
explanatory statement does not render LPPC’s comment that Requirements R1
that regional Reliability Standards ‘‘may be the Reliability Standard unenforceable. and R2 are not actual Requirements. To
developed through the NERC reliability standards the contrary, Requirements R1 and R2
development procedure, or alternatively, through a The Commission has addressed the
regional reliability standards development
state the bounds within which a
procedure that has been approved by NERC.’’ 100 CenterPoint Comments at 15. balancing authority must control its area
control error (ACE).101 For example, control areas in its region were able to 001–0. The calculation of the required
Requirement R2 requires each balancing meet CPS2 standards while the frequency response will be discussed in
authority to operate such that its average aggregate performance of the ten control BAL–002. However, neither reason is
ACE for at least 90 percent of the time areas was not in compliance. articulated in the proposed regional
is within a specific limit. These difference.
ii. Staff Preliminary Assessment 143. The Commission proposes to
Requirements set forth an effective
means for maintaining Interconnection 138. This regional difference was not approve the ERCOT regional difference.
steady-state frequency errors that are addressed in the Staff Preliminary However, the Commission proposes to
consistent with historic Interconnection Assessment. have the ERO submit a modification of
frequency performance, which is the iii. Comments the ERCOT regional difference to
stated goal of BAL–001–0. These include the requirements concerning
Requirements also have associated 139. There were no comments frequency response contained in the
Measures and Levels of Non- regarding this regional difference. ERCOT Protocols, section 5.
Compliance. iv. Commission Proposal d. Disturbance Control Performance
135. BAL–001–0 provides for an (BAL–002–0)
important function necessary to 140. Order No. 672 explains that
maintain Bulk-Power System reliability. ‘‘uniformity of Reliability Standards i. NERC Proposal
Further, the Commission agrees with should be the goal and the practice, the
rule rather than the exception.’’ 104 144. The reliability goal of this
NERC’s proposed applicability of this Reliability Standard is to utilize
standard to balancing authorities. However, the Commission has stated
that, as a general matter, regional contingency reserves to balance
136. For the reasons discussed above, resources and demand to return
the Commission believes that Reliability differences are permissible if they are
either more stringent than the continent- interconnection frequency to within
Standard BAL–001–0 is just, reasonable, defined limits following a reportable
not unduly discriminatory or wide Reliability Standard, or if they are
necessitated by a physical difference in disturbance. BAL–002–0 establishes:
preferential, and in the public interest; (1) The generic requirements that each
and proposes to approve it as mandatory the Bulk-Power System.105 Regional
differences must still be just, reasonable, regional reliability organization should
and enforceable. use to determine the amount and type
not unduly discriminatory or
c. Regional Difference to BAL–001–0: preferential and in the public of contingency reserves that will be
ERCOT Control Performance Standard 2 interest.106 needed to meet a metric called the
141. ERCOT’s Protocols concerning Disturbance Control Standard (DCS); (2)
i. NERC Proposal how to calculate the DCS metric; (3)
frequency control identify that the
137. NERC approved a regional existing ERCOT approach to procedures to be used in calculating
difference for ERCOT from Requirement Interconnection frequency control is DCS for reserve sharing groups; (4) a 15
R2 in BAL–001–0, which requires that necessary to assure reliability in that minute default disturbance recovery
the average area control error or ‘‘ACE’’ interconnection.107 However, the period; (5) a 90 minute default
for each of the six ten-minute periods existing waiver was filed prior to the contingency reserve restoration period;
during the hour must be within specific formation of these procedures. ERCOT and (6) the requirement that balancing
limits, and that a balancing authority is both a single balancing authority and authorities have access to contingency
achieve 90 percent compliance.102 This the smallest of the three reserves to respond to loss of generation,
Requirement is referred to as Control Interconnections, approximately one but not loss of load. The proposed
Performance Standard 2 (CPS2). NERC tenth of the size of the Eastern Reliability Standard would apply to
explains that ERCOT requested a waiver Interconnection. As such, frequency balancing authorities, reserve sharing
of CPS2 because: (1) ERCOT, as single control is more critical to its system groups,109 and regional reliability
control area 103 asynchronously reliability.108 organizations.
connected to the Eastern 142. The Commission notes that the ii. Staff Preliminary Assessment
Interconnection, cannot create physical difference of ERCOT compared
inadvertent flows or time errors in other 145. Requirement R3.1 requires that a
to the other two interconnections in
control areas; and (2) CPS2 may not be balancing authority or reserve sharing
terms of size is a sufficient reason for
feasible under ERCOT’s competitive group carry ‘‘at least enough
approving a regional difference. Also,
balancing energy market. In support of contingency reserves to cover the most
ERCOT’s approach of determining the
this argument, ERCOT cites to a study severe single contingency.’’ Staff noted
minimum frequency response needed
which it performed showing that under that the Requirement could be subject to
for reliability and requiring appropriate
the new market structure, the ten multiple interpretations, one limited to
generators to have specific governor
only the loss of generation, whereas the
droop appears to be a more stringent
101 NERC defines ACE as ‘‘The instantaneous other considers the loss of supply
practice than Requirement R2 in BAL–
difference between a Balancing Authority’s net resulting from a transmission or
actual and scheduled interchange, taking into generation contingency.110 Further staff
104 Order No. 672 at P 290.
account the effects of frequency Bias and correction
for meter error.’’ 105 Id. at P 291. noted that specific requirements related
102 Each regional difference approved by NERC is 106 Id. to the composition of reserves and the
provided as a separate ‘‘waiver request’’ document 107 See ERCOT Protocols, section 5 (Dispatch) at restoration time are left to Regions and
that identifies the entity requesting a waiver, the 21–23 (May 1, 2006), available at: http:// sub-Regions to determine. For example,
Reliability Standard or Requirements that are www.ercot.com/mktrules/protocols/current.html. Requirement R2 directs each regional
waived, and explanation and a statement of NERC 108 The minimum frequency response as
approval. See NERC Petition, Exhibit A. In addition, calculated by ERCOT for reliable operation is 420
reliability organization (or sub-regional
each regional difference is identified in the MW/0.1 Hz, while the measured frequency
Reliability Standard to which the waiver applies. response for the Eastern Interconnection is 109 A ‘‘reserve sharing group’’ is a group of two
103 At the time NERC granted this regional approximately 3,000 MW/0.1 Hz. ERCOT has a or more balancing authorities that collectively
difference, the term ‘‘control area’’ was used instead requirement for a minimum frequency bias that is maintain, allocate and supply operating reserves.
of ‘‘balancing authority.’’ For purposes of this almost twice that of the Eastern Interconnection See NERC glossary at 12.
discussion, they are the same. taken on the same total load basis. 110 Staff Preliminary Assessment at 30.
reliability organization or reserve and provide for a more stringent disturbance. ReliabilityFirst also agrees
sharing group) to specify its contingency disturbance reporting threshold. It that lower thresholds should be defined
reserve policies, including minimum suggests that the Commission defer to as regional differences but any
reserve requirements and allocation and and approve such regional standards difference should be demonstrated as
the permissible mix of reserves. Other already in place that correspond to technically defensible and warranted.
provisions identified by staff as vague or NERC-proposed Reliability Standards, ReliabilityFirst agrees with the Staff
missing include the definition as to but add specificity and stringency Preliminary Assessment that the
which resources and demand side without triggering a need for the procedures developed by the individual
management are eligible to be counted regional reliability organization to regions to determine contingency
as spinning reserves. Finally, staff stated provide extensive justification for a reserves need to be merged to develop
that lower reporting thresholds for the ‘‘regional difference.’’ ISO/RTO Council consistency.
size of the minimum disturbance, which states that ‘‘the requirements to recover 150. LPPC points out several
may be required by certain regional the loss of generation and returning Requirements it considers problematic.
reliability organizations, should be Area Control Error to a specified value It states that Requirement R4.1 is not a
documented as a regional difference. within a specific time period as requirement but rather a definition of
stipulated in the standard provide the some of the criteria for disturbance
iii. Comments recovery. It further states that the
needed reliability performance
146. NERC states that, with regard to yardstick.’’ 111 It continues, stating that statement in Requirement R4.1, is only
contingency reserves, the BAL–002–0 once these performance-based true if the balancing authority is not
requirement that a balancing authority requirements are in place, the regional utilizing a reserve sharing group to
restore its resource-demand balance reliability organization standards can respond to the event, and the definition
with the rest of the Interconnection provide the supplementary process should be expanded to include reserve
within 15 minutes is absolute, objective requirements. MidAmerican advocates sharing groups. LPPC suggests that there
and measurable. To meet this that the appropriate reserve sharing is some redundancy between
requirement, the balancing authority group should specify requirements for Requirements R4 and R5 and that they
must have available sufficient reserves contingency reserves, while CenterPoint could be combined. Specifically, LPPC
to recover from the largest single states that a significant amount of suggests that the first sentence of each
contingency and deploy those reserves regional variation is necessary. Requirement is essentially stating the
within 15 minutes. It states that ReliabilityFirst believes that NERC same thing. It also states the reference
‘‘leaning on the system’’ for up to 15 should provide a clear definition of to the NERC Operating Committee
minutes is an appropriate use of the spinning reserves for Interconnections. should be removed from Requirements
Interconnection. Thus, with regard to 148. MidAmerican suggests that there R4.2 and R6.2.
staff’s comments that the Reliability should be specific requirements such as
Standard does not specify minimum the percentage of reserves to load, the iv. Commission Proposal
reserve requirements and that the permissible mix of spinning reserves 151. The Commission proposes to
appropriate mix of reserves is not verses non-spinning generation to meet approve BAL–002–0 as mandatory and
defined, NERC questions whether it is operating reserves, the maximum enforceable. In addition, we propose to
appropriate to measure the desired allowable interruptible load, and other direct that NERC develop modifications
outcome (as BAL–002–0 does), or how pool rules. These requirements should to the Reliability Standard as discussed
that outcome is achieved (as staff be based on composite reliability below.
suggests). NERC suggests that the studies such as a Loss-of-Load 152. The issues identified by the
existing approach is more appropriate Expectation (LOLE) 112 in the commenters and staff can be grouped
because the ‘‘how’’ portion is driven by Interconnection. It also states that BAL– into three categories: (1) The
system design, resource mix and 002–0 should contain a planning reserve measurement of the performance of the
economics. Further, it adds that regional requirement 113 based on LOLE. contingency reserves through
variation is appropriate in determining MidAmerican suggests that BAL–002–0 Disturbance Control Standard; (2) the
the amount of contingency reserves should allow for differing regional determination of the amount and
because it is driven by the specific reserve requirements due to differing makeup of contingency reserves; and (3)
system configuration and operating generation mixes in each region. what contingencies are appropriate to
conditions; and adding greater 149. ReliabilityFirst agrees with staff’s consider.
specificity to the contingency reserve assessment. It comments that the loss of
requirements to achieve uniformity will (a) Disturbance Control Standard
supply is another contingency and
not enhance reliability but will likely suggests that the Reliability Standard 153. NERC contends that this
increase costs of compliance. NERC should further define the criteria for standard is ‘‘absolute, objective, and
states that it will review the potential contingencies and state the requirement measurable’’ in that it allows up to 15
reliability benefits and costs associated for all types of contingencies to be minutes for the recovery from a
with more specific and uniform assessed during recovery from a disturbance.114 The Commission agrees
contingency reserve requirements. with allowing up to 15 minutes for
147. Many commenters agree with the 111 ISO–RTO Council Comments, Attachment A recovery from a disturbance. To achieve
Staff Preliminary Assessment that BAL– at 3. NERC’s measurement approach, we
002–0 lacks specificity in certain areas. 112 LOLE studies are probabilistic studies
propose that NERC modify Requirement
Most commenters also argue in favor of associated with determining the probability that
there may not be sufficient generation to supply
R3.1, which currently requires that a
giving deference to regions or reserve balancing authority carry at least
firm load.
sharing groups with regard to the 113 Contingency reserves are those reserves used enough contingency reserve to cover
requirements in Requirement R2 and during real time operation to accommodate ‘‘the most severe single contingency,’’ to
certain other requirements of the uncertainties in generation failures. In contrast, include enough contingency reserve to
planning reserves have a long-term perspective.
standard. CPUC states that the While BAL–002–0 has a requirement pertaining to cover any event or single contingency,
corresponding WECC standards provide contingency reserve policy, the Reliability
specificity in areas identified by staff Standards are silent on planning reserve. 114 NERC Comments at 41.
including a transmission outage, which the ERCOT and WECC whitepapers,116 NERC Operating Committee with the
results in a significant deviation in due consideration should be given to ERO.118
frequency from the loss or mismatch of the amount of frequency response from 162. While the Commission has
supply either from local generation or generation or load needed to assure identified concerns with regard to BAL–
imports.115 We believe that this reliability. We propose that this policy 002–0, we believe that the proposal
approach would address staff’s concern be neutral as to the source of the serves an important purpose in ensuring
with Requirement R3.1 while giving due contingency reserves in terms of a balancing authority is able to utilize
weight to the ERO’s position. Further, ownership or technology. Accordingly, its contingency reserves to balance
NERC should consider whether a the Commission proposes to require resources and demand and return
frequency deviation of 20 milli Hertz NERC to develop a continent-wide interconnection frequency within
lasting longer than the 15 minute contingency reserve policy. defined limits following a reportable
recovery period should be used to 157. As identified in the Staff disturbance. Further, the proposed
define a significant deviation in Preliminary Assessment, the types of Requirements set forth in BAL–002–0
frequency. The Commission is aware resources that can be used for are sufficiently clear and objective to
that this approach is consistent with the contingency reserves should be provide guidance for compliance.
Balancing Authority ACE Limit (BAAL) consistent across the country and not 163. Accordingly, giving due weight
presently being field tested. The major have some regions allow the curtailment to the technical expertise of the ERO
difference between the proposal and the of irrigation pumps (one form of DSM) and with the expectation that the
BAAL is that the proposal is aimed at to be used as part of contingency Reliability Standard will accomplish the
preserving the historic frequency reserves while other regions do not.117 purpose represented to the Commission
performance of the system. Demand Side Management or Direct by the ERO and that it will improve the
154. The Commission agrees with Control Load Management should be on reliability of the nation’s Bulk-Power
ReliabilityFirst that lower reporting the same basis as conventional System, the Commission proposes to
thresholds for the size of the minimum generation or any other technology. approve Reliability Standard
disturbance should be defined as a Accordingly, the Commission proposes BAL–002–0 as mandatory and
regional difference. However, the above to direct NERC to modify BAL–002–0 to enforceable. In addition, pursuant to
approach eliminates that concern include a Requirement that explicitly section 215(d)(5) of the FPA and
because any event or single contingency allows demand side management as a § 39.5(f) of our regulations, the
that causes a frequency deviation above resource for contingency reserves. Commission proposes to direct that
the defined threshold would be 158. With regard to MidAmerican’s NERC submit, a modification to BAL–
included in the DCS calculation. suggestion that the BAL–002–0 002–0 that: (1) Includes a Requirement
Reliability Standard should contain a that explicitly allows demand side
(b) Determination of Amount and planning reserve requirement based on management as a resource for
Makeup of Contingency Reserves LOLE, the Commission disagrees noting contingency reserves; (2) develop a
that BAL–002–0 deals with operating continent-wide contingency reserve
155. The Commission notes that policy; 119 (3) includes a Requirement
Requirement R2 of BAL–002–0 is a ‘‘fill- reserves and not planning reserves.
that measures response for any event or
in-the-blank’’ requirement, as it directs (c) Contingencies contingency that causes a frequency
each regional reliability organization (or deviation; (4) substitutes ERO for
sub-regional reliability organization or 159. Staff’s concern regarding
transmission contingencies is resolved regional reliability organization as the
reserve sharing group) to specify its compliance monitor; 120 and (5) change
contingency reserve policies, including by the above approach in measuring
response for frequency deviation. references to the NERC Operating
minimum reserve requirements and Committee in Requirements R4.2 and
allocation and the permissible mix of 160. With regard to LPPC’s concerns, R6.2 to ERO.
reserves. NERC and many other the Commission disagrees with its
commenters state that the regional suggestion that the applicability of e. Frequency Response and Bias
determination of contingency reserves is Requirement R4.1 should be extended to (BAL–003–0)
appropriate. reserve sharing groups, noting that i. NERC Proposal
156. While the Commission believes it reserve sharing groups typically do not
calculate a combined ACE. With regard 164. The purpose of BAL–003–0 is to
is appropriate for balancing authorities
to LPPC’s comment regarding the ensure that a balancing authority’s
to have different amounts of
redundancy of R4 and R5 and the frequency bias setting 121 is accurately
contingency reserves, these amounts
should be based on one uniform suggestion that these requirements be
118 LPPC raises the same concern regarding
continent-wide contingency reserves combined, we leave that to the
references to the NERC Operating Committee in
policy. The policy should be based on discretion of the ERO. other Reliability Standards. We agree that the term
the reliability risk of not meeting load 161. We agree with LPPC’s suggestion should be removed and replaced with the term ERO
to modify Requirements R4.2 and 6.2 of in all such places.
associated with a particular balancing 119 This could be accomplished by modifying
authority’s generation mix and topology. BAL–002 to replace references to the Requirement R2 or developing a new Reliability
The appropriate mix of operating Standard.
reserves, spinning reserves and non- 116 See WECC Frequency Response Standard 120 The proposal to require that the ERO be
spinning reserves should be addressed White Paper (2005), available at http:// identified as the compliance monitor (which may
www.wecc.biz/documents/library/RITF/ then choose to delegate compliance monitor
on a consistent basis. As identified by
FRR_White_Paper_v12_1–27–06.pdf; ERCOT Energy responsibility to a Regional Entity) applies to each

Market Technical Paper 1C, Defining, Measuring Reliability Standard that currently identifies the
115 Although Frequency Response and Bias are and Valuing Frequency Response (January 2004). regional reliability organization as the compliance
discussed at length in Reliability Standard BAL– 117 See also Assessment of Demand Response and monitor. However, we will not repeat this proposal
003–0, the Commission notes here that it is Advanced Metering: Staff Report (Aug. 2006) throughout the NOPR.
important that contingency reserves should have (Demand Response Report), available at http:// 121 Frequency bias setting is a value expressed in
adequate frequency response to ensure recovery www.ferc.gov/legal/ staff-reports/demand- MW/0.1 Hz, set into a balancing authority ACE
immediately following an event. response.pdf. algorithm that allows the balancing authority to
calculated to match its actual frequency and Western Interconnections have been frequency bias setting is actually over-
response.122 Among other things, BAL– declining every year for the past biased. In particular, Southern states
003–0 establishes: (1) A Requirement for decade.125 NERC’s Frequency Response that the NERC Operating Committee
balancing authorities to review their White Paper discusses these issues in purposely chose to over-bias the
frequency bias calculation on an annual detail. frequency bias setting of the
basis to reflect any changes in their 167. Staff noted that BAL–003–0 does interconnections when it established the
frequency response and to update the not include Levels of Non-Compliance 1 percent floor and that the Eastern
frequency bias to reflect changes to any and has only one Measure. Staff pointed Interconnection frequency bias setting is
factors used in the calculation, and to out limitations in the single Measure currently over-biased by a factor of 2.4.
report frequency bias setting and contained in BAL–003–0, which Southern believes that some
methodology used to the NERC requires balancing authorities to clarification and industry feedback may
Operating Committee; (2) general conduct frequency response surveys be useful in considering issues and
Requirements on how balancing only when NERC specifically requests concerns raised by staff with regard to
authorities should calculate frequency that such surveys be performed. frequency bias and the way it is used to
bias, including which factors or iii. Comments maintain reliability.
parameters to include in the calculation;
168. NERC states that it is important iv. Commission Proposal
(3) a Requirement which establishes a
default frequency bias setting of 1 to distinguish between frequency bias 171. The Commission proposes to
percent of yearly peak demand per 0.1 and frequency response. With regard to approve BAL–003–0 as mandatory and
Hz for balancing authorities that serve the use of a frequency bias setting that enforceable. In addition, we propose to
native load; and (4) for balancing is different from actual frequency direct that NERC develop modifications
authorities that do not serve native load, response, NERC states that BAL–003–0 to the Reliability Standard as discussed
a Requirement which establishes a allows a balancing authority to set its below.
default frequency bias setting of 1 frequency bias setting to match its 172. NERC claims that BAL–003–0
percent of its estimated maximum actual frequency response. For some allows a balancing authority to set its
generation level in the coming year per balancing authorities that are unable to frequency bias setting to match its
0.1 Hz. The proposed Reliability calculate their frequency response actual frequency response. Similarly,
Standard would apply to balancing dynamically, BAL–003–0 establishes a NERC’s Petition describes the reliability
authorities. minimum of 1 percent of the balancing goal of BAL–003–0 is to: ‘‘maintain
authority’s peak demand to ensure interconnection frequency by * * *
ii. Staff Preliminary Assessment sufficient frequency response from its ensuring that the balancing authority’s
165. Staff raised the concern that use generators. Southern states that the sum frequency bias setting is appropriately
of a frequency bias setting that is of frequency bias setting for all of the matched to its actual frequency
different from the natural frequency balancing authorities in the Eastern response (governor plus load
response of the balancing authority’s Interconnection is 6,700 MW/0.1 Hz, response).’’ However, Southern asserts
area could result in less control actions whereas the actual frequency response that the Eastern Interconnection is over-
than are appropriate to preserve system is 2,800 MW/0.1 Hz. In sum, it claims biased. The Commission agrees that the
reliability.123 In addition, staff noted that the Eastern Interconnection is over- frequency bias setting at peak, as
that several metrics, such as ACE, CPS1, biased by a factor of 2.4 and the matter compared to the actual frequency
and CPS2, use frequency bias setting as of frequency bias setting should not be response of the system, is larger. The
an input and the use of an incorrect taken lightly. Commission is concerned that over-
value of frequency bias setting would 169. ReliabilityFirst agrees with staff biasing is an approach to compensate
result in incorrect measurement of that use of an inappropriate frequency for the low or no actual frequency
actual performance with respect to ACE, bias setting may have an adverse impact response from some balancing
CPS1, and CPS2. on reliability and adds that this should authorities. In addition, Southern’s
166. Staff noted that BAL–003–0 does be addressed by a team of experts. assertion that the system is over-biased
not specify the actual minimum ReliabilityFirst also states that the is inconsistent with NERC’s stated
frequency response needed for reliable Reliability Standard should include reliability goal and highlights staff’s
operation and how the frequency Levels of Non-Compliance. It states that, concern that data from actual events
response should vary with the types of although the referenced surveys are suggest an overall decline in the actual
generation used to ensure that all types intended to monitor deviations in frequency response in the Eastern and
of generators are contributing their share frequency response, the survey should Western Interconnection.
of frequency response to assure the be used more regularly. In addition, 173. In response to ReliabilityFirst
reliability of the Bulk-Power System.124 ReliabilityFirst and CenterPoint state and CenterPoint, the Commission notes
Further, staff expressed concern that that it is appropriate to allow balancing that the Requirement R2 of BAL–003–0
data from actual events show that the authorities to continue to define their allows balancing authorities to choose a
natural frequency response for Eastern own methodology for calculating methodology for calculating frequency
frequency bias setting. bias setting from at least two different
contribute its frequency response to the 170. Southern expresses concern ways. In addition, Requirement R2
Interconnection. See NERC glossary at 5. regarding staff’s statement that ‘‘the requires that each balancing authority
122 The actual frequency response is the increase frequency response of both the Eastern shall establish its frequency bias setting
in output from generators after loss of a generator and Western Interconnections has
and determines the frequency at which generation that is as close as practical to, or greater
decreased over the last 10 years’’ 126 and than, its actual frequency response.
and load come in balance again.

123 Staff Preliminary Assessment at 28–30. asserts that the Eastern Interconnection 174. In addition, the Commission
124 For example, certain generating units such as notes that BAL–003–0 addresses
125 According to NERC’s Frequency Response
combined cycle units are not capable of increasing frequency response only during normal
their output to restore the frequency back to 60 Hz White Paper (dated April 6, 2004), the frequency
and, in fact, their frequency responses tend to be response in the Eastern Interconnection has conditions and does not establish the
opposite of what is required and thus aggravate a declined at a rate of 70 MW/0.1 Hz annually. frequency bias setting that will be
situation even further. 126 Staff Preliminary Assessment at 28. required during an emergency, black
start or system restoration using of Non-Compliance and (2) modifies decreased over the last 10 years.129 This
‘‘islanding’’ schemes. Without proper Measure M1 to include yearly surveys. decrease in efficiency is an indication
frequency response, restoration of an that not all of the balancing authorities
f. Time Error Correction (BAL–004–0)
isolated area using black start generation are fully participating in time error
will be very difficult. Moreover, i. NERC Proposal corrections. The Commission expects
‘‘islanding’’ schemes used in some areas 178. The purpose of BAL–004–0 is to the ERO will ensure compliance with
of the country may not be stable without ensure that time error corrections are this Requirement.
proper frequency response. The conducted in a manner that does not 182. In addition, the Commission
Commission is aware that WECC is adversely affect the reliability of the notes that WECC has implemented an
addressing the need for proper Interconnection.128 The Reliability automatic time error correction
frequency response during all operating Standard requires that: (1) Only a procedure 130 that, according to data on
conditions, including emergencies, and reliability coordinator is eligible to serve the NERC Web site, is more effective in
that ERCOT has a procedure in place.127 as time monitor and that the NERC minimizing both time error corrections
175. Therefore, the Commission Operating Committee shall designate a and inadvertent interchange.131
invites comments whether BAL–003–0 single reliability coordinator in each Although the WECC time error
appropriately addresses frequency bias Interconnection to serve as time monitor correction procedure is not before us for
setting during normal as well as for that Interconnection; (2) the time consideration, since the WECC
emergency conditions and should a monitor shall monitor time error and procedure appears more effective, the
requirement be added for balancing initiate and terminate all corrective Commission seeks comment whether it
authorities to calculate the frequency action orders in accordance with the should require that NERC adopt
response necessary for reliability in North American Energy Standards Requirements similar to those in the
each of the interconnections and Board (NAESB) Time Error Correction WECC automatic time error correction
identify a method of obtaining that Procedure; (3) each balancing authority procedure.
frequency response from a combination shall participate in time error 183. While the Commission has
of generation and load resources. corrections; and (4) any reliability identified concerns with regard to BAL–
176. Further, the surveys mentioned coordinator in an Interconnection may 004–0, we believe that the Reliability
in Measure M1 are only conducted request the time monitor to terminate a Standard serves an important purpose
when NERC requests such surveys. The time error correction for reliability in ensuring that time error corrections
Commission proposes that yearly reasons, and that balancing authorities are conducted in a manner that does not
surveys should be performed to may request termination of a time error adversely affect the reliability of the
compare the calculated frequency bias correction through their respective Interconnection. NERC should include
values against actual frequency response reliability coordinator for reliability Levels of Non-Compliance and
to refine the balancing authorities’ reasons. The proposed Reliability additional Measures. Nonetheless, the
frequency bias setting. While the Standard would apply to reliability proposed Requirements set forth in
Commission has identified concerns coordinators and balancing authorities. BAL–004–0 are sufficiently clear and
with regard to BAL–003–0, we believe objective to provide guidance for
ii. Staff Preliminary Assessment compliance.
that the Reliability Standard serves an
important purpose in ensuring that 179. Staff noted that this Reliability 184. Accordingly, giving due weight
balancing authorities accurately Standard does not contain any Measures to the technical expertise of the ERO
calculate their frequency bias setting to or Levels of Non-Compliance. Staff and with the expectation that the
match their frequency response. While highlighted the importance of Reliability Standard will accomplish the
we have proposed a number of developing Measures to assure that each purpose represented to the Commission
improvements to the Reliability balancing authority and reliability by the ERO and that it will improve the
Standard, we nonetheless, believe that coordinator participates in achieving reliability of the nation’s Bulk-Power
the proposed Requirements set forth in time error corrections since an analysis System, the Commission proposes to
BAL–003–0 are sufficiently clear and of time error correction data available approve Reliability Standard BAL–004–
objective to provide guidance for on the ERO’s Web site indicates that 0 as mandatory and enforceable. In
compliance. participation may be lacking. addition, pursuant to section 215(d)(5)
of the FPA and § 39.5(f) of our
177. Accordingly, giving due weight iii. Comments regulations, the Commission proposes to
to the technical expertise of the ERO direct that NERC submit a modification
and with the expectation that the 180. ReliabilityFirst agrees with staff
that BAL–004–0 lacks Measures and to BAL–004–0 that includes Levels of
Reliability Standard will accomplish the Non-Compliance and additional
purpose represented to the Commission Levels of Non-Compliance.
Measures. Further, as discussed above,
by the ERO and that it will improve the iv. Commission Proposal the Commission seeks comment
reliability of the nation’s Bulk-Power whether it should require that NERC
System, the Commission proposes to 181. Although Requirement R3
requires that all balancing authorities adopt Requirements similar to those in
approve Reliability Standard BAL–003–
0 as mandatory and enforceable. In participate in time error corrections,
addition, pursuant to section 215(d)(5) data from the NERC time error Web page 129 NERC, Time Error Reports, at http://
indicates that the efficiency of the time www.nerc.com/~filez/∼timerror.html. Yearly data

of the FPA and § 39.5(f) of our for total efficiency was 117 percent for 1996 and 65
regulations, the Commission proposes to error correction has significantly percent for 2005. If there is more participation than
direct that NERC submit a modification needed, the efficiency can be greater than 100
128 The NERC glossary defines ‘‘time error percent. The goal is to be near 100 percent.
to BAL–003–0 that (1) includes Levels 130 See http://www.wecc.biz/documents/library/
correction’’ as ‘‘an offset to the Interconnection’s
scheduled frequency to return the Interconnection procedures/Time_Error_ Procedure_10–04–02.pdf.
127 See WECC’s Frequency Response Standard Time Error to a predetermined value.’’ NERC 131 See http://www.nerc.com/~filez/∼inadv.html
White Paper (2005), at http://www.wecc.biz/ glossary at 14. Time error is caused by the (regarding inadvertent interchange data) and
documents /library/RITF /FRR_White_Paper_ accumulation of frequency error over a given http://www.nerc.com/~filez/∼timerror.html
v12_1–27–06.pdf period. (regarding time error correction).
the WECC automatic time error authority.132 It suggests that, in lieu of CPS requirements of BAL–001–0.
correction standard. requiring generators to provide However, the balancing authority may
automatic generation control units, not itself have generation or control over
g. Automatic Generation Control (BAL–
balancing authorities should have a loads that are the sources of regulating
005–0)
specified percentage of their load reserves. In contrast, a generation
i. NERC Proposal subject to automatic generation control. operator or load-serving entity typically
CPUC also states that the characteristics has (or could have) the facilities to
185. The reliability goal of this of the load in the area and the amount provide automatic generation control
Reliability Standard is to maintain of generation that is responsive to capabilities to the balancing authority.
Interconnection frequency by requiring changes in voltage and frequency Recognizing that insufficient automatic
that all generation, transmission, and should also be considered. generation control would constitute a
customer load be within the metered 189. LPPC states that Requirement violation of this Reliability Standard,
boundaries of a balancing authority R17, which provides that each balancing the Commission is interested in
area, and establishing the functional authority must periodically calibrate its understanding if any balancing
requirements for the balancing time error and frequency devices, authority is experiencing or is
authority’s regulation service, including should be moved to a ‘‘facility’’ (FAC) predicting any difficulty in obtaining
its calculation of ACE. BAL–005–0 Reliability Standard and should also sufficient automatic generation control.
requires that: (1) All generation, apply to the transmission operations 193. With regard to CPUC’s concern,
transmission, and load operating within and reliability coordinators. LPPC states the Commission does not propose a
an Interconnection must be included that balancing authorities do not have requirement that all generators provide
within the metered boundaries of a time error devices and the reliability automatic generation control
balancing authority area; (2) each coordinator is responsible for capabilities. The Commission
balancing authority shall maintain monitoring time error. It also states that recognizes that, due to unit
regulating reserve to meet the control the requirement to calibrate time error characteristics or operating restrictions,
performance standard; and (3) adequate devices should be deleted. certain types of resources may not be
metering, communication and control capable of operation with automatic
equipment are employed in the iv. Commission Proposal
generation control, or automatic
provision of regulation service. In 190. The Commission proposes to generation control may not be
addition, the Reliability Standard approve Reliability Standard BAL–005– economically feasible. With regard to
includes a series of requirements 0 as mandatory and enforceable. In CPUC’s suggestion that the Reliability
pertaining to the operation of automatic addition, we propose to direct that Standard require a balancing authority
generation control and a series of NERC modify the Reliability Standard to to have a certain percentage of its load
requirements pertaining to the address the Commission’s concerns subject to automatic generation control,
calculation of ACE. The proposed discussed below. the Commission notes that this may be
Reliability Standard would apply to 191. Currently, the title of the one method of determining the amount
balancing authorities, generator Reliability Standard implies that only of regulating reserve necessary to meet
operators, transmission operators, and generators can participate in regulation Requirement R2.
load serving entities. control portion of contingency reserves. 194. The Commission notes that there
The title should be changed from are frequency excursions without loss of
ii. Staff Preliminary Assessment Automatic Generation Control to clearly generation on a regular basis. Also,
186. Staff stated that this Reliability indicate that it includes the systems significant frequency excursions,
Standard does not require a generation necessary to implement Demand Side without loss of generation are becoming
operator or load-serving entity to Management and Direct Control Load more frequent.134 The Commission
provide automatic generation control Management as part of contingency proposes that BAL–005–0 include a
capabilities to its balancing authority. reserves and not just conventional Requirement that addresses the amount
Nor does it require the calculation of the generation. of automatic generation control a
192. The stated goal of this Reliability balancing authority must have, prior to
amount of automatic generation control
Standard is to assure that all generation a contingency, to ensure that load
the generation operators or load-serving
and load is under the control of a variations and changes in schedules can
entities must have at all times. Without
balancing authority. Ideally, the be accommodated without frequency
these requirements, it is not possible to
balancing authority would have control deviations beyond an appropriate
determine whether there are adequate
over adequate amounts and types of threshold.
resources to maintain system frequency generation reserves and controllable
close to 60 Hz. Staff also noted that this 195. Requirement R17 requires
load management resources under all balancing authorities to calibrate time
Reliability Standard does not contain operating conditions and at all times.133
Measures or Levels of Non-Compliance. error and frequency devices annually
The Commission notes that according to the accuracy levels detailed
iii. Comments Requirement R2 of BAL–005–0 requires in the Reliability Standard. The
a balancing authority to obtain sufficient Commission disagrees with LPPC that
187. ReliabilityFirst agrees with Staff regulating reserves controlled by
that Measures and Levels of Non- the reference to the calibration of time
automatic generation control to meet the error devices should be removed from
Compliance need to be added to this
Reliability Standard. 132 Staff
Requirement R17 of this Reliability
Preliminary Assessment at 32.
Standard. The Commission prefers that
188. CPUC expresses concern 133 NERC Resources Subcommittee (Frequency
Requirements intended to achieve a
regarding a statement in the Staff Task Force), Frequency Response Standard

Whitepaper (2004), at http://www.nerc.com/pub/ specific reliability goal be in the same
Preliminary Assessment that BAL–005– sys/all_updl/oc/rs/ Reliability Standard or group of
0 does not require generator operators or Frequency_Response_White_Paper.pdf. See also
WECC Reserve Issues Task Force, Frequency
Reliability Standards. Since the BAL
load-serving entities to provide
Response Standard White Paper (2005), at http://
automatic generation control www.wecc.biz/documents/library/RITF/ 134 See PJM RTO White Paper, Frequency
capabilities to the balancing FRR_White_Paper_v12_1–27–06.pdf. Excursions, by Koza, Williams and Herbsleb.
group of Reliability Standards contains from jointly-owned generation; (3) all Interchange Payback Standard—WEQ–
reliability goals concerning frequency, Interconnection points be equipped 007’’ deals with how balancing
the Commission believes that with common megawatt-hour meters authorities should eliminate their
Requirement R17 is appropriately with readings provided to adjacent inadvertent interchanges. According to
placed in BAL–005–0. balancing authorities; (4) adjacent NERC, real-time imbalances between the
196. While we have identified balancing authorities compute and generation and load are appropriately
concerns with regard to BAL–005–0, we record inadvertent interchange on an dealt with in BAL–001–0 and BAL–002–
believe that the proposal serves an hourly basis using common net 0.
important purpose in ensuring that the scheduled interchange and net actual 203. TAPS argues that the treatment
functional requirements of a balancing interchange values, and use the agreed- afforded to balancing authorities under
authority’s regulation service are met. to data to compile their monthly NERC’s proposed Reliability Standards
The Commission believes it is important accumulated inadvertent interchange; and NAESB rules is not comparable to
that NERC include Measures, including and (5) balancing authorities make after the treatment afforded to non-control-
a Measure that would provide for the fact corrections to the agreed-to area utilities under the Commission’s
verification of minimum automatic inadvertent amount as needed to reflect OATT. In particular, TAPS states that,
generation control or regulating actual operating conditions. The under the NERC standards, no penalties
reserves, and Levels of Non- proposed Reliability Standard would are assessed on a balancing authority for
Compliance. Nonetheless, the proposed apply to balancing authorities. inadvertent interchange whereas under
Requirements set forth in BAL–005–0 199. This Reliability Standard does the OATT, penalties are assessed on
are sufficiently clear and objective to not contain Measures but does contain non-control-area utilities for energy
provide guidance for compliance. a compliance monitoring process which imbalances. TAPS is concerned that the
197. Accordingly, giving due weight requires a balancing authority to submit OATT Reform NOPR does not
to the technical expertise of the ERO monthly inadvertent interchange reports adequately address the disparate
and with the expectation that the to its regional reliability organization. treatment of imbalances.
Reliability Standard will accomplish the The regional reliability organization is 204. ReliabilityFirst agrees with staff
purpose represented to the Commission then required to submit a monthly that requirements should be added to
by the ERO and that it will improve the inadvertent interchange summary for its prevent balancing authorities from
reliability of the nation’s Bulk-Power region to NERC. This Reliability depending excessively on other
System, the Commission proposes to Standard contains one Level of Non- balancing authorities.
approve Reliability Standard BAL–005– Compliance which states that if a 205. LPPC states that Requirement R2
0 as mandatory and enforceable. In balancing authority does not timely of BAL–006–0, which provides that
addition, pursuant to section 215(d)(5) submit its inadvertent interchange each balancing authority shall include
of the FPA and § 39.5(f) of our report to the regional reliability all AC tie lines that connect to its
regulations, the Commission proposes to organization, it shall be considered non- adjacent balancing authority areas in its
direct that NERC submit a modification compliant. inadvertent interchange account, should
to BAL–005–0 that: (1) Includes apply to ‘‘physical’’ adjacent balancing
Requirements that identify the ii. Staff Preliminary Assessment authorities. It explains that the NERC
minimum amount of automatic 200. Staff found that this Reliability glossary explains that an ‘‘adjacent
generation control or regulating reserves Standard does not contain any balancing authority’’ is interconnected
a balancing authority must have at any Requirement that would prevent a to another balancing authority either
given time; (2) changes the title of the balancing authority from excessively directly or via a multi-party agreement
Reliability Standard to be neutral as to depending on other balancing or transmission tariff. Thus, according
source of the reserves; (3) includes DSM authorities over time. This makes it to LPPC, the meaning of this
and Direct Control Load Management as possible for balancing areas to lean on Requirement changed when the word
part of contingency reserves; and (4) other balancing areas and not settle their ‘‘physical’’ was removed during the
includes Levels of Non-Compliance and inadvertent accounts on a timely basis. conversion to the Version 0 standards.
Measures, including a Measure that Data available from the NERC Web site LPPC also contends that Requirements
provides for a verification process over indicates that the magnitudes of R4.1, R4.1.1, R4.1.2, R4.2, R4.3, and R5
the minimum required automatic inadvertent interchange for some are after-the-fact energy accounting
generation control or regulating reserves regional reliability organizations in the practices and should be incorporated
a balancing authority maintains. Eastern Interconnection are into the NAESB business practices.
h. Inadvertent Interchange (BAL–006–1) increasing.136 LPPC also suggests that Requirement R3
201. Staff also noted that this standard of BAL–006 is redundant with
i. NERC Proposal does not contain Measures and contains Requirement R12.1 in BAL–005–0.
198. BAL–006–1135 requires that: (1) a single Level of Non-Compliance which
iv. Commission Proposal
Each balancing authority calculate and is only associated with a Requirement
record inadvertent interchange on an for submission of a monthly report on 206. The Commission proposes to
hourly basis; (2) all AC tie lines with inadvertent interchange. approve Reliability Standard BAL–006–
adjacent balancing authority areas be 1 as mandatory and enforceable. In
iii. Comments addition, we propose to direct that
included in a balancing authority’s
inadvertent account, and the balancing 202. NERC contends that inadvertent NERC modify the Reliability Standard to
authority take into account interchange imbalances do not affect the real-time address the Commission’s concerns
operations of the Bulk-Power System. discussed below.
135 On August 28, 2006, NERC submitted BAL– Rather, they represent accumulation of 207. The Commission agrees with
006–1 for approval, which replaces BAL–006–0. the real-time imbalances over hours, NERC that inadvertent imbalances do
BAL–006–1 is the same as BAL–006–0 except that days and weeks. A separate NAESB not affect the real-time operations of the
it includes a regional difference for SPP under an
urgent action procedure. The comments submitted standard, referred to as ‘‘Inadvertent Bulk-Power System. While large
in response to the Staff Preliminary Assessment on inadvertent imbalances pose no
BAL–006–0 apply equally to BAL–006–1. 136 See Staff Preliminary Assessment at 32 n.63. immediate threat to grid reliability, they
represent dependence by some Commission believes that it is important iii. Commission Proposal
balancing authorities on their neighbors. for NERC to provide Measures and 216. The two proposed regional
The Commission notes that WECC has additional Levels of Non-Compliance. differences relate solely to facilitating
placed a limit on the inadvertent Nonetheless, the proposed financial settlements of accumulated
accumulation based on the bias of the Requirements set forth in BAL–006–1 inadvertent interchange and have
balancing authority. We invite are sufficiently clear and objective to minimal, if any, reliability implications.
comments as to whether accumulation provide guidance for compliance. These regional differences allow
of large amount of inadvertent 212. Accordingly, giving due weight
coordination with the current RTO
imbalances is a concern to the industry to the technical expertise of the ERO
market tariffs and promote incentives
and if so, options to address the and with the expectation that the
that would deter balancing authorities
accumulation. Reliability Standard will accomplish the
from depending excessively on other
208. With respect to TAPS concerns purpose represented to the Commission
balancing authorities. Accordingly, the
regarding disparate treatment of by the ERO and that it will improve the
Commission proposes to approve these
imbalances for non-control area utilities, reliability of the nation’s Bulk-Power
regional differences.
the Commission is addressing this issue System, the Commission proposes to
in the OATT Reform NOPR, and TAPS approve Reliability Standard BAL–006– 2. CIP: Critical Infrastructure Protection
should pursue its concerns in that 1 as mandatory and enforceable. In
a. Overview
proceeding. Moreover, the issues raised addition, pursuant to section 215(d)(5)
by TAPS do not impact reliability of the of the FPA and § 39.5(f) of our 217. The Critical Infrastructure
Bulk-Power System, but instead are regulations, the Commission proposes to Protection group of Reliability
economic in nature. direct that NERC submit a modification Standards, as filed, consists of two
209. We disagree with LPPC’s to BAL–006–1 that adds Measures and standards aimed at reporting
comment that Requirement R2 should additional Levels of Non-Compliance occurrences of sabotage to the proper
be applicable only to ‘‘physical’’ including Measures concerning the authorities and establishing security for
adjacent balancing authorities because it accumulation of large inadvertent critical cyber assets. The first standard
is reasonable to include those balancing imbalances. is CIP–001–0 (Sabotage Reporting). The
authorities that are not physically second standard is Urgent Action 1200
adjacent but are connected by a multi- i. Regional Differences to BAL–006–1: (UA–1200), which addresses the cyber
party agreement or transmission tariff. Inadvertent Interchange Accounting and security of bulk electric system assets.
210. With regard to LPPC’s comment Financial Inadvertent Settlement UA–1200 was filed by NERC for
that several of the Requirements should i. NERC Petition informational purposes only and is
be incorporated into NAESB business 213. BAL–006–1 provides for two therefore not the subject of Commission
practices, the Commission notes that regional differences. First, NERC action in this proposed rule.
there is currently an industry process in explains that a regional difference is
place between NERC and NAESB to b. NERC Proposal
needed for an RTO with multiple
determine which standards or portions balancing authorities. The control area 218. CIP–001–0 requires that each
of standards should be developed as participants of MISO requested that reliability coordinator, balancing
business practices. The Commission MISO be given an Inadvertent authority, transmission operator,
prefers to use that process to resolve Interchange account so that financial generation operator and load-serving
issues with the particular Requirements settlement of all energy receipts and entity: (1) Have procedures for
highlighted by LPPC. With respect to deliveries using LMP could be recognizing and for making their
LPPC’s comment that Requirement R3 of implemented to meet their Commission operating personnel aware of sabotage
BAL–006–0 is redundant with directed market obligations. events; (2) have procedures for
Requirement R12.1 in BAL–005–0, the Subsequently, Southwest Power Pool communicating information concerning
Commission observes that the two (SPP) requested, and NERC approved, sabotage events to appropriate ‘‘parties’’
Requirements, although worded that the same regional difference apply in the interconnection; (3) provide
somewhat differently, are very similar. to SPP as well.137 operating personnel with guidelines for
We propose to require NERC to review 214. Second, a regional difference reporting disturbances due to sabotage
these Requirements and remove any would apply to the control area events; and (4) establish
unnecessary duplication. participants of MISO and SPP that communications contacts with
211. As mentioned above, the would allow the RTO to financially applicable government officials and
Reliability Standard includes a single settle inadvertent energy between develop appropriate reporting
Level of Non-Compliance that is procedures. The reliability goal of the
control areas in the RTO. Each RTO
triggered if a balancing authority fails to standard is to ensure that operating
would maintain accumulations of the
report its inadvertent interchange on entities recognize sabotage events and
net inadvertent interchange for all the
time. There are no specific Measures inform appropriate authorities and each
control areas in the RTO after the
concerning the accumulation of large other to properly respond to the
financial settlement and as such would
inadvertent imbalances. Nor are there sabotage (via cyber or physical means)
not affect the accumulation of net-
Measures and Levels of Non- to minimize the impact on the Bulk-
interchange by non-participant control
Compliance associated with each of the Power System.
areas.
Requirements. While the Commission
has identified concerns with regard to ii. Comments c. Staff Preliminary Assessment
BAL–006–1, we believe that the 215. These regional differences were 219. Staff noted that CIP–001–0 does
proposal serves an important purpose in not addressed in the Staff Preliminary not require an entity to actually contact
defining a process to ensure that Assessment and, consequently, no a governmental or regulatory body in
balancing areas do not excessively comments were received. the event of sabotage (though staff
depend on other balancing areas in the acknowledged that Standard EOP–004–
Interconnection for meeting their 137 BAL–006–1, filed on August 28, 2006, would 0 does contain such a requirement).
demand or interchange obligations. The extend the regional difference to SPP. Staff also found that there is no
definition of ‘‘sabotage’’ in the 001–0 are enforceable. While the sabotage. For example, NERC may want
Reliability Standard, which could lead common understanding of the term to consider the requirements for timely
to inconsistent application. Finally, staff sabotage should suffice in most reporting developed by the Department
stated that CIP–001–0 does not contain circumstances, we are concerned that of Homeland Security found in the
Measures or Levels of Non-Compliance. situations may arise in which it is not Electric Sector Information Sharing &
clear whether action pursuant to CIP– Analysis Center (ESISAC) Indications,
d. Comments
001–0 is required. For example, a break- Analysis and Warning Program (IAW)
220. In response to the Staff in that gains access to a control room Standard Operating Procedure (SOP).142
Preliminary Assessment, NERC but does not cause damage, or a Accordingly, the Commission proposes
comments that a requirement for physical attack that results in minor to direct NERC to modify the Reliability
reporting to government agencies is a damage, may be reported as sabotage by Standard to require an applicable entity
matter of jurisdiction of the respective one entity but not another. Thus, the to contact appropriate federal
government agencies and not one of ERO should provide guidance clarifying authorities, such as the Department of
reliability. NERC states that it will the triggering event for an entity to take Homeland Security, in the event of
consider developing a definition of action pursuant to CIP–001–0. sabotage within a specified period of
sabotage, though it believes there is no 225. CIP–001–0 requires that an time.
confusion within industry regarding the applicable entity have procedures for 228. The Commission is further
meaning of ‘‘sabotage’’ in CIP–001–0. recognizing sabotage events and making concerned that CIP–001–0 does not
221. ReliabilityFirst comments that its operating personnel aware of include a requirement for the periodic
language in CIP–001–0 is ambiguous but sabotage events. However, it does not review or updating of sabotage reporting
does not identify any specific examples. establish baseline requirements plans or procedures, or for the periodic
It states that CIP–001–0 is a ‘‘Version 0’’ regarding what issues should be testing of the sabotage reporting
standard, which means that it was not addressed by the developed procedures. procedures to verify that they achieve
developed using NERC’s ANSI- For example, a procedure could identify the desired result. The Commission
accredited standards development a chronological ‘‘checklist’’ of minimum believes that a periodic review is
process. ReliabilityFirst further actions that would apply if a sabotage appropriate because appropriate
comments that, during the development event occurs, such as the timing and methods of responding to a sabotage
process for standards CIP–002 through chain of communication, the event may change or become more
CIP–009, the drafting team generally preservation of evidence, repairing sophisticated. Also, contacts for
considered that standard CIP–001–0 damage and contacting the appropriate reporting an incident should be
dealt only with physical sabotage law enforcement officials. periodically updated.
reporting and, therefore, addressed 226. As stated above, while an 229. As mentioned above, CIP–001–0
cyber incident reporting requirements in applicable entity must establish does not contain Measures or Levels of
CIP–008. communication contacts, there is no Non-Compliance. Though CenterPoint
222. With regard to the lack of Requirement in CIP–001–0 that an believes that compliance elements
metrics, CenterPoint observes that applicable entity actually contact the would be difficult to develop, the
metrics would be difficult to develop.138 appropriate governmental or regulatory Commission believes that Measures and
e. Commission Proposal body in the event of sabotage consistent Levels of Non-Compliance are important
with the purpose of the standard, which in this Reliability Standard to assure the
223. The Commission proposes to states that ‘‘[d]isturbances or unusual consequences of failure to comply with
approve CIP–001–0 as mandatory and occurrences, suspected or determined to the requirements are clear and
enforceable. In addition, we propose be caused by sabotage, shall be reported unambiguous.
directing that NERC develop to the appropriate systems, 230. While the Commission has
modifications to the Reliability governmental agencies, and regulatory identified concerns with regard to CIP–
Standard, as discussed below. bodies.’’ 141 We believe that mandatory 001–0, we believe that the proposal
224. Order No. 672 explained that one reporting of a sabotage event is serves an important purpose in ensuring
of the factors that the Commission important to achieve the reliability goal that operating entities properly respond
considers when reviewing a proposed of this proposed Reliability Standard. to sabotage events to minimize the
Reliability Standard is whether the Further, since sabotage is an intentional adverse impact on the Bulk-Power
proposal is clear and unambiguous.139 action directed at a specific entity, the System. The Commission believes that it
The Requirements of CIP–001–0 refer to timely reporting of such events is of the is important for NERC to provide
a ‘‘sabotage event’’ but do not define utmost importance as a tool to warn Measures and Levels of Non-
that term. Generally, we believe that other entities of potential problems. Compliance for this proposed Reliability
‘‘sabotage’’ is a commonly understood 227. With regard to NERC’s Standard, and that a definition of
term 140 and the Requirements of CIP– comments, NERC has not adequately ‘‘sabotage’’ will provide desired clarity.
explained its statement that reporting of Nonetheless, the proposed
138 Many commenters address concerns that staff
sabotage is an issue of jurisdiction Requirements set forth in CIP–001–0 are
raised with UA–1200. Those comments ran the
gamut from support to disagreement with the Staff
instead of reliability. It may be sufficiently clear and objective to
Preliminary Assessment. Since UA–1200 was necessary for NERC to lay the provide guidance for compliance.
submitted for informational purposes only, we will groundwork with the appropriate 231. Accordingly, giving due weight
not address this Reliability Standard or related government agencies, such as the to the technical expertise of the ERO
comments in the NOPR. and with the expectation that the
139 Order No. 672 at P 325
Federal Bureau of Investigation or
Department of Homeland Security, on Reliability Standard will accomplish the
140 The American Heritage Dictionary defines
‘‘sabotage’’ as ‘‘1. Destruction of property or an appropriate protocol for a report of purpose represented to the Commission
obstruction of normal operations, as by civilians or
enemy agents in time of war. 2. Treacherous action 141 Reference in CIP–001–0 to Standard EOP– 142 ESISAC IAW SOP requires a preliminary
to defeat or hinder a cause or an endeavor; 004–0, which requires entities to report actual or report to be filed within 60 minutes, a follow-up
deliberate subversion.’’ The American Heritage suspected physical or cyber attacks to the U.S. report to be filed within four to six hours after the
Dictionary of the English Language, (Houghton Department of Energy Operations Center would preliminary report and a final report to be filed
Mifflin Co., 4th Ed. 2000). improve CIP–001–0. within 60 days.
by the ERO and that it will improve the 235. Accordingly, while the b. Telecommunications (COM–001–0)
reliability of the nation’s Bulk-Power Commission encourages the use of i. NERC Proposal
System, the Commission proposes to performance metrics in conjunction
approve Reliability Standard CIP–001–0 with Measures and Requirements, we 238. NERC states that COM–001–0
as mandatory and enforceable. In reject CenterPoint’s suggestion that the ensures coordinated
addition, pursuant to section 215(d)(5) proposed Communications Reliability telecommunications among operating
of the FPA and § 39.5(f) of our Standards be replaced with performance entities, which is fundamental to
regulations, the Commission proposes to metrics. maintaining grid reliability. This
direct that NERC submit a modification proposed Reliability Standard
to CIP–001–0 that: (1) Includes Local Control Centers establishes general telecommunications
Measures and Levels of Non- 236. The terms transmission operator requirements for specific operating
Compliance; (2) gives guidance for the and generator operator in NERC’s entities, including equipment testing
term ‘‘sabotage’’; (3) requires an functional model include the activities and coordination. It also establishes
applicable entity to contact appropriate that those operators would perform to English as the common language
Federal authorities, such as the achieve their specific reliability goals. between and among operating
Department of Homeland Security, in As identified by MISO and Allegheny, personnel, and sets policy for using the
the event of sabotage within a specified confusion can arise when using these NERCNet telecommunications system.
period of time; and (4) requires periodic terms in the context of an ISO or RTO COM–001–0 applies to transmission
review of sabotage response procedures. or in any organization that pools operators, balancing authorities,
resources. In such organizations, reliability coordinators and NERCNet
3. COM: Communications user organizations.
decision making and implementation
a. Introduction are performed by separate groups. The 239. NERC indicates that it will
232. The Communications group decision-making portion of the modify this proposed Reliability
contains two Reliability Standards. The transmission operator and, to a lesser Standard to address the lack of
first Reliability Standard requires that extent, the generation operator function Measures and Levels of Non-
transmission operators, balancing typically is completed by the ISO or Compliance and resubmit the proposal
authorities and other applicable entities RTO. The actual implementation is for Commission approval in November
have adequate internal and external performed by either local transmission 2006.
telecommunications facilities for the control centers or independent ii. Staff Preliminary Assessment
exchange of interconnection and generation control centers. For example, 240. The Staff Preliminary
operating information necessary to the transmission and generation owners Assessment pointed out that the COM–
maintain reliability. The second usually operate and maintain the 001–0 contains a general requirement to
Reliability Standard requires that these individual facilities, control systems, provide ‘‘adequate and reliable’’
communication facilities be staffed and SCADA systems, etc. The data from telecommunications facilities for all
available for addressing real-time these locations are sent to the ISO or applicable operating entities, but does
emergencies and that operating RTO control center either directly or not provide specific or minimum
personnel carry out effective through the entity’s local control center. requirements on adequacy, redundancy
communications. Upon receipt, the operators in the ISO and diverse routing of the
or RTO control center make decisions telecommunications facilities necessary
General Issues
that are transmitted to the local to ensure the exchange of operating
Performance Metrics transmission and generation control information, both internally and among
233. CenterPoint comments that centers. In some ISO or RTO the operating entities.143
‘‘some or all’’ of the Communication arrangements, the request for action may 241. Staff also indicated that the
group of Reliability Standards should be be further divided and sent to Requirements set forth in the proposed
replaced by establishing performance individual generation facilities or Reliability Standard do not differentiate
metrics. It suggests that the Commission transmission switching stations where it between operating entities with
refer these Reliability Standards back to is actually implemented. different needs. Staff explained that, for
NERC with a directive to explore 237. The Commission proposes that example, reliability coordinators need
replacing process-oriented requirements all control centers and organizations telecommunication facilities beyond
with performance metrics. CenterPoint that are necessary for the actual those required by other operating
points to ERCOT as an example of a implementation of the decisions or are entities. In addition, staff noted that
region that is developing performance needed for operation and maintenance generator operator is not designated as
metrics for telemetry and made by the ISO or RTO or the pooled an applicable entity.
telecommunication infrastructure resource organizations are part of the
necessary to ensure situational transmission or generation operator iii. Comments
awareness and address commercial function in the functional model. All of 242. NERC states with respect to
considerations associated with a the requirements for telecommunication Blackout Report Recommendation No.
planned transition to a nodal market would apply to all of these entities as 26, which called for a tightening of its
design. appropriate to their respective functions communications protocols and
234. The Commission believes that within the transmission or generation upgrading its communication hardware,
including performance metrics within a operation functional model. Further, we that it has installed a new conference
Reliability Standard in specific note that this proposed definition of bridge, approved a new set of hotline
instances would be an improvement. responsibility within a function would procedures for reliability coordinator
However, we do not see the apply to other Reliability Standards that hotline calls and is working on an
development of performance metrics, address such activities as training, upgrade of its Reliability Coordinator
lagging and/or forward-looking, as an operator certification, transmission Information System that provides real-
adequate substitute for a mandatory and operations, and cyber and physical
enforceable Reliability Standard. security. 143 Staff Preliminary Assessment at 45.
time information to reliability a Reliability Standard that reduces the proposes to direct NERC to modify
coordinator control areas. NERC also flexibility of applicable entities in COM–001–0 to include requirements for
states that it is not aware of any achieving compliance or implementing communication facilities for use during
operating problems this Reliability new technologies and motivates emergency situations and periodic
Standard is causing. It explains that the applicable entities to simply achieve testing of these facilities.
methods chosen by operating entities to compliance with the minimum 251. While the Commission has
provide adequate and reliable requirement. Accordingly, we seek identified a number of concerns with
communications facilities ‘‘will drive comment on the specific requirements regard to COM–001–0, this proposed
their needs for backup communications or performance criteria for Reliability Standard serves an important
facilities and communications circuits telecommunications facilities.145 purpose by requiring transmission
with diverse routing.’’ 144 248. Further, assuming we direct operators and others to have necessary
243. MRO generally agrees with staff’s NERC to develop such specific telecommunication equipment. Further,
assessment of COM–001–0 and suggests requirements, the Commission also NERC should provide Measures and
that the Reliability Standard be seeks comment whether the modified Levels of Non-Compliance for this
reviewed and modified in its entirety. It Reliability Standard should provide proposed Reliability Standard.
believes the Reliability Standard must requirements that also consider the Nonetheless, the Requirements set forth
balance the capability that the relative role of applicable entities. in COM–001–0 are sufficiently clear and
telecommunications industry can While the Commission believes that objective to provide guidance for
realistically provide against what is applicable entities of all roles should compliance.
needed for reliability. MRO provides an have adequate telecommunications 252. Accordingly, giving due weight
example of a situation where an electric equipment, the needs will likely vary to the technical expertise of the ERO
utility makes a good faith effort to based on role. We would expect a and with the expectation that the
comply with a dual communication modification to COM–001–0, if directed, Reliability Standard will accomplish the
path mandate by contracting with a to develop sufficient information so that purpose represented to the Commission
third party vendor without knowing that transmission owners and other by the ERO and that it will improve the
this path contains a single point of applicable entities of all sizes will have reliability of the nation’s Bulk-Power
failure for both communication paths. some specific guidance as to what is System, the Commission proposes to
244. ReliabilityFirst comments on the required to maintain an acceptable approve Reliability Standard COM–001–
need for expedited development of telecommunications facility. 0 as mandatory and enforceable. In
missing Measures and Levels of Non- 249. The Commission notes that this addition, pursuant to section 215(d)(5)
Compliance. Reliability Standard is applicable to of the FPA and § 39.5(f) of our
transmission operators, balancing regulations, we propose to direct that
authorities, reliability coordinators, and
245. The Commission proposes to NERC submit a modification to COM–
NERCNet user organizations. However,
approve Reliability Standard COM–001– 001–0 that: (1) Includes Measures and
during normal and emergency
0 as mandatory and enforceable. In Levels of Non-Compliance; (2) includes
operations, communications with
addition, we propose to direct that generator operators and distribution
additional entities are required. For
NERC develop modifications to the provider as applicable entities; and (3)
example, during a blackstart when
Reliability Standard, as discussed includes requirements for
normal communications may be
below. communication facilities for use during
disrupted, it is essential that the
246. With regard to MRO’s concern emergency situations.
transmission operator, balancing
about redundancy, we believe that the authority, and reliability coordinator c. Communications and Coordination
Reliability Standard is sufficiently clear have communications with the (COM–002–1)
that the functional entity is responsible generator operators and distribution
for achieving redundancy and diverse i. NERC Proposal
providers. The Commission proposes
routing requirements. that NERC modify the applicability 253. The stated purpose of COM–002–
247. The Staff Preliminary section of COM–001–0 to make 1 is to ensure that transmission
Assessment expressed concern that generator operators and distribution operators, generator operators and
COM–001–0 does not provide specific providers as applicable entities and balancing authorities have adequate
or minimum requirements on adequacy, modify the requirements of this communications and that their
redundancy and diverse routing of the Reliability Standard as necessary to communications capabilities are staffed
telecommunications facilities necessary account for this change. and available to address real-time
to ensure the exchange of operating 250. Telecommunication facilities for emergency conditions. This Reliability
information. While MRO concurs with emergency operations including Standard requires balancing authority
staff, NERC suggests that the methods restoration require special provisions and transmission operators to notify
chosen to comply with COM–001–0 will which are lacking in COM–001–0. others through pre-determined
‘‘drive’’ the applicable entities’ need for Inadequate telecommunication facilities communication paths of any condition
redundant telecommunication facilities during emergency operations would that could threaten the reliability of its
and diversely routed telecommunication aggravate the duration and extent of the area or when firm load shedding is
circuits. The Commission believes that emergency and delay the subsequent anticipated. NERC has indicated that it
the Reliability Standard might be restoration. Periodic testing of will modify this Reliability Standard to
improved if NERC was to provide telecommunication facilities will insure address the lack of Measures and Levels
specific or minimum requirements for that these facilities are functional when of Non-Compliance and resubmit it for
adequacy, redundancy and diverse required. Accordingly, the Commission Commission approval in November
routing. At the same time, we are 2006.
145 Loss of data from some entities may result in
concerned that the addition of specific
errors or non convergence of state estimators and ii. Staff Preliminary Assessment
or minimum requirements may result in security analysis, which may result in loss of a wide
area view, situational awareness, and economic 254. Staff explained that COM–002–1
144 NERC Comments at 118. information such as LMP. does not require that ‘‘the appropriate
operating actions in normal and coordinator’s] area.’’ 147 As noted above, coordinator’s area must be
emergency operating conditions that several commenters are of the opinion communicated to the appropriate
may have reliability impact beyond a that this Reliability Standard does not reliability coordinator for assessment
local area or Reliability Coordinator’s recognize that operating actions can and approval prior to implementation to
area * * * be assessed and approved by have reliability impacts beyond the ensure reliability of the interconnected
the Reliability Coordinator, before being local area for which a particular systems.149 NERC should work from
implemented by the operating reliability coordinator is responsible. these components to develop
entities.’’ 146 Staff noted that Blackout NERC disagrees on this issue and points modifications to COM–002–0 that will
Report Recommendation No. 26 calls for out that other Reliability Standards implement Blackout Report
effective communications, but COM– require coordination and Recommendation No. 26.
002–1 does not provide for ‘‘tightened communications among operating
communication protocols.’’ entities. However, the Reliability 260. The Commission notes that this
Standards to which NERC refers require Reliability Standard is applicable to
iii. Comments transmission operators, balancing
such coordination and communications
255. NERC agrees with the need to only in limited, specified authorities, reliability coordinators, and
develop additional Reliability Standards circumstances. Further, while NERC generator operators. However, during
addressing consistent communications states that other Reliability Standards normal and emergency operations,
protocols among personnel responsible require coordination and communications with additional
for the reliability of the Bulk-Power communications among all operating entities are required. For example,
System. However, NERC does not entities, the Commission notes that during emergency situations, it is
believe that ‘‘tightened communication transmission operators have unilateral essential that the transmission operator,
protocols’’ required by the Blackout authority to mitigate transmission (SOL balancing authority, and reliability
Report should include the requirement and IROL) violations within their coordinator have communications with
that operating actions in normal and jurisdictions. Thus, those entities can
emergency conditions must be assessed distribution providers. The Commission
take actions that place others at risk proposes that NERC modify the
and approved by the reliability because they do not have a wide area
coordinator before being implemented applicability section of COM–002–1 to
view. Accordingly, we propose directing
by the operating entities. Other NERC to add a Requirement that the make distribution providers applicable
Reliability Standards require reliability coordinator assess and entities and modify the requirements of
coordination and communications approve actions that have impacts this Reliability Standard as necessary to
among all operating entities, and beyond the area views of transmission account for this change.
transmission operators and balancing operators and balancing authorities. 261. While the Commission has
authorities have adequate authority to 259. In addition, we also believe that identified concerns regarding COM–
restore imbalances and mitigate tightened protocols are necessary. The 002–1, this proposed Reliability
transmission (SOL and IROL) violations. Blackout Report identifies ineffective Standard serves an important purpose
256. National Grid agrees with the communication as one of the common by requiring users, owners and
Staff Preliminary Assessment that factors among major cascading operators of the Bulk-Power System to
tighter communications protocols are outages.148 The Commission recognizes implement the necessary
needed with respect to assessment and NERC for its efforts in following up on
communications and coordination
approval of operating actions under Blackout Report Recommendation No.
among entities. NERC should provide
normal and emergency conditions, but it 26, especially with respect to specific
believes any new requirements belong communication protocols implemented Measures and Levels of Non-
in COM–002–1, which deals with to date. We encourage NERC to continue Compliance. Nonetheless, the
coordination rather than COM–001–0, its effort in working with industry with Requirements set forth in COM–002–1
which sets forth requirements for the goal to incorporate their work into are sufficiently clear and objective to
telecommunication facilities. National the Reliability Standards to achieve provide guidance for compliance.
Grid states that this Reliability Standard technical excellence as part of NERC’s 262. Accordingly, giving due weight
for communication protocols should not stated goal. In addition, these efforts to the technical expertise of the ERO
be intermixed with Reliability should include priorities that target and with the expectation that the
Standards for communication facilities. improving the Reliability Standards in Reliability Standard will accomplish the
257. ReliabilityFirst and MRO the near future. Specifically, NERC purpose represented to the Commission
maintain that, without specific should modify COM–002–0 to ‘‘tighten’’ by the ERO and that it will improve the
Measures and Levels of Non- communications, especially for reliability of the nation’s Bulk-Power
Compliance, NERC will not be able to communications during alerts and System, The Commission proposes to
implement consistent and effective emergencies. Staff explained in the Staff approve Reliability Standard COM–002–
enforcement of COM–002–1. MRO states Preliminary Assessment that this can be 1 as a mandatory and enforceable. In
that the Reliability Standard should understood to include two key
addition, pursuant to section 215(d)(5)
clarify the role of the Regional Entities components: (1) Effective
and clarify any distinctions between communications that are delivered in
regulations, we propose to direct that
COM–001–0 and COM–002–1. clear language via pre-established
communications paths among pre- NERC submit a modification to COM–
iv. Commission Proposal identified operating entities; and (2) 002–1 that: (1) Includes Measures and
258. COM–002–1 requires communications protocols which Levels of Non-Compliance; (2) includes
communications with the reliability clearly identify that any operating a Requirement for the reliability
coordinator through predetermined actions with reliability impact beyond a coordinator to assess and approve
paths when a condition could threaten local area or beyond a reliability actions that have impacts beyond the
‘‘the reliability of [the reliability area views of transmission operators or
147 COM–002–1, Requirement R1.1.
146 Staff Preliminary Assessment at 44. 148 Blackout Report at 107. 149 Staff Preliminary Assessment at 43–44.
balancing authorities; 150 (3) includes capable of being implemented within 30 time the Staff Preliminary Assessment
distribution providers as applicable minutes after declaration of an operating was issued.
entities; and (4) requires tightened emergency to be ambiguous. According 268. ReliabilityFirst agrees that the
communications protocols, especially to staff, the requirement could be read reliability coordinator is the highest
for communications during alerts and to imply that load-shedding capability authority on the bulk electric system
emergencies. Alternatively, with respect with an implementation time of up to 30 with regard to real time, coordinated
to this final issue, we propose to direct minutes is acceptable to address system operations. The plans mentioned in the
NERC to develop a new Reliability emergencies. Staff deemed this Reliability Standard are intended for
Standard that responds to Blackout conclusion to be inappropriate. It could operators within each reliability
Report Recommendation No. 26 in the expose the system to higher risk because coordinator’s respective area.
manner just described. load shedding is the option of last resort ReliabilityFirst states that the 30 minute
and must be capable of being load-shedding requirement establishes a
4. EOP: Emergency Preparedness and maximum threshold. It is expected that
Operations implemented much sooner than 30
minutes. Finally, staff noted that the action that can be taken prior to that
a. Overview Reliability Standard does not define deadline will be implemented as soon
263. The Emergency Preparedness transmission-related ‘‘normal,’’ ‘‘alert,’’ as possible.
and Operations (EOP) group of proposed and ‘‘emergency’’ states, does not 269. The ISO/RTO Council and
Reliability Standards consists of nine provide criteria for entering into these Alberta agree that EOP–001–0 should
Reliability Standards that address states, nor does it identify authority for apply to reliability coordinators. ISO/
preparation for emergencies, necessary declaring these states. RTO Council notes that NERC’s
actions during emergencies, and system Reliability Coordinator Working Group
iii. Comments is conducting a pilot program in the
restoration and reporting following
disturbances. 266. NERC maintains that staff’s summer of 2006 to define terms to be
concerns regarding reliability used in ‘‘normal,’’ ‘‘alert’’ and
b. Emergency Operations Planning ‘‘emergency’’ conditions. The ISO/RTO
(EOP–001–0) coordinator involvement are addressed
in other Reliability Standards. It states Council recommends that NERC adopt
i. NERC Proposal these terms as part of the NERC glossary
that proposed Reliability Standard IRO–
following completion of the pilot
264. NERC’s proposed Reliability 001–0 requires a reliability coordinator
program.
Standard EOP–001–0 requires each to have plans and coordination 270. CPUC comments that it is
transmission operator and balancing agreements to mitigate capacity and reasonable to state that expeditious load
authority to develop, maintain, and energy emergencies. Proposed shedding must be available, if that is the
implement a set of plans to mitigate Reliability Standard IRO–005–0 intent of Commission staff’s discussion
operating emergencies. These plans provides more details on handling of the load-shedding timing requirement
must be coordinated with other emergencies and mitigating SOL and in EOP–001–0. However, the CPUC
transmission operators and balancing IROL violations. Further, Attachment 1 takes the position that it is not
authorities, and the reliability to proposed Reliability Standard EOP– reasonable to require that all load
coordinator. The Reliability Standard 002–1 provides procedures that a load- shedding capability be available within
applies to balancing authorities and serving entity can use to work with its 30 minutes. That would entail very
transmission operators and identifies reliability coordinator to obtain capacity significant, and possibly unnecessary,
the regional reliability organization as and energy when it has exhausted all costs to the detriment of ratepayers.
responsible for monitoring compliance. other options and can no longer provide
It also requires the regional reliability its customers’ expected energy iv. Commission Proposal
organization to review and evaluate requirements. NERC also states that the 271. The Commission proposes to
emergency plans every three years to NERC Operating Committee approves approve proposed Reliability Standard
ensure that these plans consider the every reliability coordinator reliability EOP–001–0 as mandatory and
elements that the Reliability Standard plan and posts those plans on its Web enforceable. In addition, the
specifies should be considered when site. Finally, NERC states that the 30- Commission proposes to direct that
developing an emergency plan, e.g., minute limit for mitigating IROL NERC develop modifications to the
system energy use, load management violations is one of many standards Reliability Standard, as discussed
and, environmental constraints. gleaned from decades of interconnected below.
ii. Staff Preliminary Assessment systems operation experience, and 272. The proposed Reliability
concludes that requiring SOL and IROL Standard applies to transmission
265. Staff noted that while EOP–001– mitigation ‘‘as soon as possible’’ but operators and balancing authorities. The
0 requires a transmission operator and within no longer than 30 minutes is Commission believes that the
balancing authority to develop, reasonable because it allows the system applicability portion of the Reliability
maintain, and implement a set of plans operator to decide on what course of Standard is sufficiently clear as to who
to mitigate operating emergencies action to take. must comply with the filed version of
resulting from either insufficient
267. MRO agrees with staff that the the standard and can be enforced on
generation or transmission, there is no
reliability coordinator should be these entities. However, commenters
similar requirement for a reliability
required to have an emergency plan. express concern that it does not assign
coordinator, which is the highest level
The requirement that load reduction a role to the reliability coordinator.
of authority responsible for the Bulk-
plans be capable of implementation NERC states that the reliability
Power System. Staff also found the

within 30 minutes should be clarified, coordinator is the ‘‘entity that is the
requirement that transmission operators
and the Reliability Standard should highest level of authority who is
have emergency load reduction plans
include the definitions for ‘‘normal,’’ responsible for the reliable operation of
150 This Requirement could be included in this ‘‘alert’’ and ‘‘emergency states.’’ the Bulk Electric System, has the Wide
communication Reliability Standard or in an However, MRO notes that these Area view of the Bulk Electric System,
operating Reliability Standard(s), at NERC’s option. definitions were not finalized at the and has the operating tools, processes
and procedures, including the authority software that identify for system objective to provide guidance for
to prevent or mitigate emergency operators the current system state and compliance.
operating situations in both next-day clear procedures have been established 278. Accordingly, giving due weight
analysis and real-time operations.’’ 151 to assist the operator in returning the to the technical expertise of the ERO
Given the importance NERC attributes system to the normal state as quickly as and with the expectation that the
to the reliability coordinator in possible. Indeed, the overall operational Reliability Standard will accomplish the
connection with matters covered by objective is to proactively operate the purpose represented to the Commission
EOP–001–0, the Commission is Bulk-Power System to achieve a normal by the ERO and that it will improve the
persuaded that this Reliability Standard system state as contemplated by FPA reliability of the nation’s Bulk-Power
should also apply to the reliability section 215. System, the Commission therefore
coordinator and proposes that it be 275. The Commission believes that proposes to approve Reliability
modified to include the reliability there is a need for clearly defined Standard EOP–001–0 as mandatory and
coordinator as an applicable entity. system states to be incorporated into enforceable. In addition, pursuant to
273. The proposed Reliability real-time operation that can section 215(d)(5) of the FPA and
Standard allows load reduction within significantly improve operator § 39.5(f) of our regulations, we propose
30 minutes of IROL violations. NERC recognition of emergency conditions, to direct that NERC submit a
maintains that requiring SOL and IROL rapid and accurate response, and modification to EOP–001–0 that: (1)
mitigation ‘‘as soon as possible’’ but recovery to normal system conditions. Includes the reliability coordinator as an
within no longer than 30 minutes is In addition, a clearly defined set of applicable entity with responsibilities as
reasonable because it allows the system system states implemented in real-time described above; (2) clarifies the 30-
operator to decide on what course of will help the operator proactively avert minute requirement in Requirement R2
action to take. The Commission escalation of system disturbances and of the Reliability Standard to state that
understands that it is not the intent of thus avert cascading outages and load shedding should be capable of
this Reliability Standard to require that reliability standard violations. being implemented as soon as possible
shedding of all available load occur Moreover, statistics surrounding and much less than 30 minutes; and (3)
within 30 minutes, but rather only the operating states based on the duration includes definitions of system states to
amount necessary to correct system and frequency of excursions to non- be used by the operators, such as
emergencies. However, NERC’s normal system states can provide transmission-related ‘‘normal,’’ ‘‘alert,’’
conclusion that IROL or SOL mitigation understanding for the operator, and ‘‘emergency’’ states, provides
within no longer than 30 minutes is management, the ERO and regulators on criteria for entering into these states,
reasonable does not address the how reliably the system is being and identifies the authority that will
Commission’s concern. That concern is operated, how reliable it was operated declare these states.
rooted in the view that load shedding over historic periods, trends in
must be capable of being implemented reliability performance and metrics that c. Capacity and Energy Emergencies
as soon as possible and much sooner can provide part of the foundation for (EOP–002–1)
than 30 minutes. The reference to 30 defining ‘‘an adequate level of i. NERC Proposal
minutes in EOP–001–0 could suggest reliability’’ that we required in our
that anything up to that limit is Order certifying the ERO. 279. EOP–002–1 applies to balancing
acceptable. Consistent with NERC’s 276. We therefore propose that the authorities and reliability coordinators
comments, the Commission proposes ERO modify this Reliability Standard to and is intended to ensure that they are
that this Reliability Standard should be include clearly defined system states for prepared for capacity and energy
modified to clarify that load shedding capacity, energy, and transmission to be emergencies. NERC states that the
should be capable of being implemented implemented in real-time operations. proposed Reliability Standard requires
as soon as possible and much less than We note that some control areas define that balancing authorities have the
30 minutes. and effectively use more than the authority to bring all necessary
274. Recommendation No. 20 of the ‘‘normal,’’ ‘‘alert’’ and ‘‘emergency’’ generation on line, communicate the
Blackout Report called for establishing system states included in the Blackout energy and capacity emergency with the
‘‘clear definitions for the normal, alert, Report recommendations. The ERO reliability coordinator, and coordinate
and emergency operational system should determine the optimum number with other balancing authorities. NERC
conditions,’’ and stated that the ‘‘roles, of system states to be employed also states that the Reliability Standard
responsibilities and authorities of continent-wide for consistency in the limits a balancing authority’s use of any
Reliability Coordinators and control development of reliability performance other balancing authority’s bias
areas under each condition’’ should be metrics and should consider the contribution to the Interconnection,
clarified.152 In the Commission’s view, addition of the restoration state. referred to as ‘‘leaning on the ties.’’
the inability to identify clearly when the 277. While the Commission has EOP–002–1 includes an attachment that
system is operating outside of the identified concerns with regard to EOP– describes an emergency procedure to be
normal/secure system state, and the 001–0 that call for improvements, we initiated by a reliability coordinator that
resulting inability to recognize the level believe that the Reliability Standard in declares one of four energy emergency
of reliability deterioration experienced its present form serves an important alert levels to provide assistance to the
under all system conditions (other than purpose in promoting appropriate load serving entity.
the normal/secure system state), planning for operating emergencies. For
instance, while we believe clarifying the ii. Staff Preliminary Assessment
represents a deficiency that should be
resolved. Some ISOs and RTOs clearly terms ‘‘normal,’’ ‘‘alert,’’ and 280. The Staff Preliminary
define multiple operating system states ‘‘emergency’’ will provide for clearer Assessment explained that while EOP–
ranging from normal to restoration. metrics for measuring performance, the 002–1 addresses responsibility,
System metering data and computer Commission believes that system authority and actions to be taken to
operators generally understand when alleviate a generation capacity and
151 NERC glossary at 11. the system is in each of these states. The energy emergency, it does not address
152 Blackout Report at 158. Requirements are sufficiently clear and an emergency resulting from insufficient
transmission capability, nor is this issue iv. Commission Proposal weight to the technical expertise of the
addressed elsewhere in other proposed 284. The Commission shares the ERO and with the expectation that the
Reliability Standards. Staff noted that concern expressed by MRO and the ISO/ Reliability Standard will accomplish the
transmission loading relief (TLR) RTO Council that the Emergency Plan purpose represented to the Commission
procedures discussed in Reliability required by EOP–002–1 addresses only by the ERO and that it will improve the
Standard IRO–006–3 are not appropriate generation capacity and energy reliability of the nation’s Bulk-Power
for addressing actual transmission emergencies and does not address System, the Commission proposes to
emergencies since, as stated in the emergencies resulting from inadequate approve Reliability Standard EOP–002–
Blackout Report, they are ‘‘not fast and transmission capability. NERC states 1 as mandatory and enforceable. In
predictable enough for use in situations that other Reliability Standards address addition, pursuant to section 215(d)(5)
in which an Operating Security Limit is mitigation of SOL and IROL violations of the FPA and § 39.5(f) of our
close to or actually being violated.’’ 153 due to loss of transmission facilities. regulations, we propose to direct that
While we agree with NERC that other NERC submit a modification to EOP–
iii. Comments
Reliability Standards address mitigation 002–1 that: (1) Addresses emergencies
281. NERC states that, while EOP– of SOL and IROL violations, we remain resulting not only from insufficient
002–1 does not address emergencies concerned that neither EOP–002–1 nor generation but also from insufficient
resulting from insufficient transmission any other Reliability Standard addresses transmission capability, including
capability, a number of other proposed the impact of inadequate transmission situations where insufficient
Reliability Standards related to during generation emergencies. transmission impacts the
transmission operation and reliability 285. Requirement R6 of EOP–002–1 implementation of the capacity and
coordination address the need to identifies various remedies that a energy emergency plan; (2) identifies
operate within facility limits, SOL and balancing authority should use to demand side management in
IROL. NERC states that collectively the comply with Control Performance and Requirement R6 as one possible remedy
proposed Reliability Standards address Disturbance Control Standards that a balancing authority should use to
emergencies resulting from insufficient including loading all available bring it in compliance with Control
transmission capability. generating capacity and deploying all Performance and Disturbance Control
available operating reserve. The Standards; and (3) includes a clear
282. MRO and ReliabilityFirst state
Commission proposes that the ERO warning that the TLR procedure is an
that they agree with staff’s assessment of
modify Requirement R6 to include use inappropriate and ineffective tool to
EOP–002–1. In addition, MRO states
of demand side management as one of mitigate IROL violations or for use in
that TLRs are not appropriate for
the possible remedies. emergency situations.
addressing actual transmission
286. MRO and the ISO/RTO Council
emergencies for the reasons stated in the d. Load Shedding Plans (EOP–003–0)
express concern that the TLR method is
Blackout Report.
inappropriate for addressing actual i. NERC Proposal
283. The ISO/RTO Council states that transmission emergencies. The
before approving EOP–002–1, the Commission’s proposal to address this 288. EOP–003–0 deals with load-
Commission should direct NERC to concern is discussed fully in relation to shedding plans and requires that
include in that Reliability Standard a Reliability Standards IRO–006–3 where balancing authorities and transmission
requirement to assess whether sufficient the use of TLRs to mitigate potential or operators operating with insufficient
transmission capability exists to allow actual SOL and IROL violations is transmission and generation capacity
the capacity and energy emergency plan specified in these standards. The have the capability and authority to
mandated by the Reliability Standard to Commission shares the concerns of shed load rather than risk a failure of
be ‘‘robust enough to ensure adequate commenters about the use of TLR the Interconnection. The proposed
resources.’’ The ISO/RTO Council also procedures for reasons stated in the Reliability Standard includes
agrees with staff’s concerns that TLRs Blackout Report, i.e., they are not fast requirements to establish plans for
are not appropriate for addressing actual and predictable enough for use in automatic load shedding for
transmission emergencies for the situations in which an operating underfrequency or undervoltage,
reasons stated in the Blackout Report. It security limit is close to being, or manual load shedding to respond to
notes that ISOs and RTOs use actually is being, violated. The real-time emergencies, and
redispatch to correct SOL and IROL Commission therefore proposes to communication with other balancing
instead of TLR procedures. Moreover, instruct the ERO to include a clear authorities and transmission operators.
the ISO/RTO Council states that ISOs warning that the TLR procedure is an NERC indicates that it plans to modify
and RTOs that redispatch to protect inappropriate and ineffective tool to EOP–003–0 to include Measures and
system reliability do not get credit for mitigate IROL violations or for use in Levels of Non-Compliance.
such actions when another entity emergency situations.
declares a TLR event. It also states that 287. While the Commission has ii. Staff Preliminary Assessment
redispatch allows for a far more identified concerns with regard to EOP–
targeted, and thus effective, tool to 002–1 that call for improvements, we 289. Staff stated that EOP–003–0 does
resolve an imminent reliability threat believe that the proposed Reliability not specify the minimum load-shedding
than does a TLR, which can trigger Standard serves an important purpose capability that should be provided and
additional TLRs on neighboring in promoting the goal of ensuring that the maximum amount of delay before
systems. As a result, the applicability of balancing authorities and reliability load shedding can be implemented.
any Reliability Standard that relies on coordinators are prepared for capacity Staff noted that this Reliability Standard
TLRs as the specific reliability tool to be and energy emergencies. In addition, the does not require that safeguards be
used in an ISO or RTO region could be Requirements of the proposed provided to shield operators from
detrimental to system reliability. Reliability Standard are sufficiently retaliation when they declare an
clear and objective to provide guidance emergency or shed load in accordance
153 Id. at 163. for compliance. Accordingly, giving due with previously approved guidelines, as
the Blackout Report recommends.154 In instability, uncontrolled separation and addressed to ‘‘legislative bodies and
addition, the Staff Preliminary cascading, while other portions of the regulators,’’ recommends that operators
Assessment observed that the Reliability Eastern Interconnection are very who initiate load shedding pursuant to
Standard does not require periodic susceptible to these events. approved guidelines should be shielded
drills of simulated load shedding. It MidAmerican states that it may be more from ‘‘liability suits or other forms of
stated that such drills are important to important to provide additional load- retaliation, provided their action is
test the effectiveness of the processes, shedding capabilities in the portion of pursuant to previously approved
communications and protocols, and to the Interconnection that is more guidelines.’’ 155 Neither the Commission
familiarize operators from reliability susceptible to instability. nor the ERO has authority under section
coordinators, transmission operators 293. Southern, ReliabilityFirst and 215 of the FPA to shield operators from
and load serving entities with their MRO agree with staff that transmission liability suits for actions that they take
respective roles and responsibilities in operators who initiate load shedding or fail to take. Further, the Commission
connection with the load shedding pursuant to guidelines should be believes that an added Requirement to
plans. shielded from liability or retaliation. shield operators from retaliation would
Southern states that it seems more be vague and beyond the scope of the
iii. Comments appropriate to also address limitation of Reliability Standard. As explained by
290. NERC states that it considers liability in each transmission owner’s NERC, the proposed Reliability
operator liability to be a regulatory OATT. Southern also submits that the Standards provide direction to operators
rather than a reliability issue, but that it role of the reliability coordinator as on when they should manually initiate
has taken relevant action on two fronts. currently established under EOP–003–0 load shedding. The goal of EOP–003–0
First, Version 0 of the proposed is appropriate and is consistent with its is to ensure that a transmission operator
Reliability Standards provides direction role in maintaining reliability. Southern ‘‘must have the capability and authority
to operators on when they should states that while the reliability to shed load’’ and the Requirements
manually initiate load shedding, and coordinator should be aware of the provide the specifics on how this is to
expects operators to be empowered to restoration plan required by the be achieved. We believe that this is
take whatever action is necessary to Reliability Standard, approval of that sufficient to empower operators to take
ensure the reliability of the Bulk-Power plan would have no clear benefit. necessary action to ensure the reliability
System without fear of liability claims. of the Bulk-Power System. The
Second, the regional reliability iv. Commission Proposal
Commission notes that NERC has
organizations are reviewing the 294. As discussed above, EOP–003–0 required each transmission operator
applicability of automatic load-shedding does not specify the minimum load- post a letter from its CEO stating that
plans in specific geographic areas, and shedding capability that should be there will be no retaliation against
are to present their recommendations to provided and the maximum amount of system operators that shed load in
NERC. delay before load shedding can be accordance with approved corporate
291. MRO states that the requirement implemented. The Commission policies and procedures. A review of
that the balancing authority and disagrees with MRO’s position that such letters is included in NERC
transmission operator have the adding a minimum load shedding Readiness Reviews. The Commission
capability and authority to shed load capability and timeframe will not believes that this is an acceptable
rather than risk an uncontrolled failure improve the Reliability Standard approach.
is sufficient to meet the intent of this because the Reliability Standard does 296. MRO concurs with staff that the
Reliability Standard and that the not specify amount or timeframe to shed Reliability Standard should require
additional information suggested by load. The actual amount of load to be periodic drills of simulated load
staff is unnecessary. MRO maintains shed, location and timeframe will be at shedding. It suggests that NERC better
that the amount of load to be shed and the discretion of the system operator identify the type of training that is
the timeframe for shedding it is directly based on the nature of the system required to include load shed drills.
related to the system problem or problem and his assessment of Load shedding drills will improve the
condition at the time of the event. corrective actions required. However, if operator response to emergencies,
Adding an expected percentage and the capability to shed sufficient load in including timely implementation of
timeframe will not improve the locations where it is required and in a load shedding. The Commission
Reliability Standard and would likely timely manner is not available to the therefore proposes to direct the ERO to
not meet every situation or system system operator then the risk of modify this Reliability Standard to
condition. MRO also concurs with staff uncontrolled failure of system elements require periodic drills of simulated load
that the Reliability Standard should or cascading outages is increased due to shedding.
require periodic drills of simulated load no or delayed actions to shed load. The 297. The Reliability Standard does not
shedding and suggests that NERC better Commission agrees with MidAmerican contain any Measures or Levels of Non-
identify the type of training that should that specifying a minimum capability Compliance. The Commission proposes
include load shed drills. and maximum allowable delay is that it be modified to address this
292. MidAmerican shares staff’s necessary to ensure an adequate load- deficiency.
concerns and suggests that the shedding plan to contain a disturbance 298. While the Commission has
Reliability Standard should mandate and prevent system cascading. The identified concerns with regard to EOP–
regional studies to determine the Commission proposes that the 003–0, we believe that the proposal
appropriate minimum requirements for Reliability Standard should be modified serves an important purpose in ensuring
load shedding, recognizing the regional to address this matter. We recognize that load-shedding plans are developed and
network is a portion of the this issue may be addressed on a that appropriate capability and
interconnected network. It notes that regional basis if it meets the authority for load shedding exists. As
certain portions of the Eastern requirements for a regional difference as noted above, EPO–003–0 raises several
Interconnection are not susceptible to suggested by MidAmerican. issues that require NERC’s attention.
295. Blackout Report
154 Id. at 147. Recommendation No. 8, which is 155 Id. at 147.
Nonetheless, the proposed for Commission approval in November Power System to provide data that will
Requirements set forth in EOP–003–0 2006. assist NERC in the investigation of a
are sufficiently clear and objective to blackout or disturbance.
iii. Comments 305. While the Commission has
provide guidance for compliance.
299. Accordingly, giving due weight 302. NERC states that procedures to identified concerns with regard to EOP–
to the technical expertise of the ERO conduct future blackout and disturbance 004–0, we believe that the proposal
and with the expectation that the investigations should not be included in serves an important purpose in
Reliability Standard will accomplish the the Reliability Standards. NERC states establishing requirements for reporting
purpose represented to the Commission that it has developed these procedures and analysis of system disturbances.
by the ERO and that it will improve the and that they are provided as an While the Commission believes that
reliability of the nation’s Bulk-Power appendix to its proposed ERO Rules of additional Requirements are needed, the
System, the Commission proposes to Procedure. proposed Requirements set forth in
approve Reliability Standard EOP–003– 303. MRO supports staff’s conclusion EOP–004–0 are sufficiently clear and
0 as mandatory and enforceable. In that this Reliability Standard does not objective to provide guidance for
addition, pursuant to section 215(d)(5) address the Blackout Report’s compliance.
of the FPA and § 39.5(f) of our recommendation that a standing 306. Accordingly, giving due weight
regulations, the Commission proposes to framework be established for to the technical expertise of the ERO
direct that NERC submit a modification conducting future blackout and and with the expectation that the
to EOP–003–0 that (1) specifies the disturbance investigations. MRO Reliability Standard will accomplish the
minimum load-shedding capability that maintains that NERC and the DOE purpose represented to the Commission
should be provided and the maximum procedures provide a formal process for by the ERO and that it will improve the
investigating disturbances. reliability of the nation’s Bulk-Power
amount of delay before load shedding
can be implemented; (2) requires iv. Commission Proposal System, the Commission proposes to
periodic drills of simulated load approve Reliability Standard EOP–004–
304. The Commission agrees with the 0 as mandatory and enforceable. In
shedding; and (3) contains Measures MRO that this Reliability Standard does
and Levels of Non-Compliance. addition, pursuant to section 215(d)(5)
not address the Blackout Report’s of the FPA and § 39.5(f) of our
e. Disturbance Reporting (EOP–004–0) Recommendation No. 14 to establish a regulations, the Commission proposes to
standing framework for conducting of direct that NERC submit a modification
i. NERC Proposal future blackout and disturbance to EOP–004–0 that: (1) includes any
300. Proposed Reliability Standard investigations and proposes that the requirements necessary for users,
EOP–004–0 establishes requirements for Reliability Standard be modified to owners and operators of the Bulk-Power
reporting system disturbances to the specify those requirements included in System to provide data that will assist
regional reliability organization and the the ERO Rules of Procedure that apply NERC in the investigation of a blackout
ERO. It also establishes requirements for to users, owners and operators of Bulk- or disturbance; and (2) includes
the analysis of these disturbances. NERC Power System. NERC states that it has Measures and Levels of Non-
indicates that the Reliability Standard’s developed these procedures, and they Compliance.
purpose is to minimize the likelihood of are provided as an appendix to its
similar events in the future. NERC states proposed ERO Rules of Procedure. f. System Restoration Plans (EOP–005–
that EOP–004–0 is linked to DOE Although the Commission 1)
disturbance reporting requirements and acknowledges that, under § 39.2 of our i. NERC Proposal
Energy Information Administration regulations, all users, owners and
307. Proposed Reliability Standard
(EIA) Form 417. operators of the Bulk-Power System
EOP–005–1 156 deals with system
must comply with the ERO Rules,
ii. Staff Preliminary Assessment restoration plans and requires that
which includes its Rules of Procedure, plans, procedures, and resources be
301. Commission staff noted that we believe that requirements outlined in available to restore the electric system to
EOP–004–0 does not address the these procedures that apply to users, a normal condition in the event of a
Blackout Report’s recommendation that owners and operators of the Bulk-Power partial or total system shut down. The
a standing framework be established for System must be included in this Reliability Standard requires
conducting future blackout and Reliability Standard, but not the rules of transmission operators, balancing
disturbance investigations. Staff noted procedure themselves, so that they authorities, and reliability coordinators
that the U.S. Department of Energy become mandatory and enforceable. The to have effective restoration plans, to
(DOE) made a presentation to the NERC Commission believes that including test those plans, and to be able to restore
Board of Trustees on preparing for an these requirements in this Reliability the interconnection using them
investigation, priority actions following Standard will promote system reliability following a blackout. It also requires
a blackout, and the investigation by ensuring that users, owners and operating personnel to be trained in
process. Staff also noted that NERC has operators of the Bulk-Power System these plans.
prepared a procedure for responding to provide data to assist NERC 308. NERC’s August 28, 2006
major events that affect the bulk electric investigations and ensuring that the Supplemental Filing included a revised
system. Staff indicated it believes that Reliability Standard is clear and version of EOP–005, designated EOP–
the DOE presentation and the NERC complete. Such requirements include 005–1. The revised Reliability Standard
procedure provide a reasonable basis for the provision of system disturbance includes two new Requirements, R9 and
revising EOP–004–0. In addition, staff data, voice recordings and other
noted that the Reliability Standard does information collected during the event 156 On August 28, 2006, NERC submitted EOP–
not contain any Measures or Levels of to support the analysis of the event after 005–1 for approval, which replaces EOP–005–0.
Non-Compliance. Staff acknowledged the fact. Therefore, we propose to direct EOP–005–1 is the same as EOP–005–0 except for
the changes noted above. Thus, comments
that NERC has indicated this deficiency that NERC modify EOP–004–0 to submitted in response to the Staff Preliminary
will be addressed and that the include any requirements necessary for Assessment on EOP–005–0 apply equally to EOP–
Reliability Standard will be resubmitted users, owners and operators of the Bulk- 005–1.
R10, and two revised requirements, R4 telecommunications facilities and by Measures; and (2) identifies time frames
and R8. The new Requirement R9 giving some attention to the technical for training and review of restoration
requires that the transmission operator requirements of ‘‘essential plan requirements to simulate
document the cranking paths, including telecommunications facilities.’’ contingencies and prepare operators for
initial switching requirements, between 312. Alberta states that EOP–005–0 is anticipated and unforeseen events.
each blackstart generating unit and the an example of a Reliability Standard
that should not be approved but should g. Reliability Coordination-System
unit(s) to be started. The new
continue as a voluntary Reliability Restoration (EOP–006–0)
Requirement R10 requires the
transmission operator to demonstrate Standard unless it is determined that i. NERC Proposal
through simulation or testing, the the Reliability Standard would have an 317. Proposed Reliability Standard
blackstart units can perform their adverse effect on system reliability. EOP–006–0 deals with reliability
intended function and that simulation Alberta states that Requirement R1 of coordination and system restoration. It
or testing be performed at least once the Reliability Standard is missing establishes specific requirements for
every five years. The revised elements—although it does not identify reliability coordinators during system
Requirement R4 requires the them—and lacks measurability, and it restoration, and it states that reliability
transmission operator to coordinate its therefore should remain voluntary until coordinators must have a coordinating
restoration plans with the generator it is revised.157 role in system restoration to ensure that
owners in addition to others. The iv. Commission Proposal reliability is maintained during
revised Requirement R8 requires restoration and that priority is placed on
transmission operators to verify that the 313. The Commission agrees with
restoring the Interconnection.
number, size, availability, and location MRO and National Grid that the
of system blackstart generating units are Reliability Standard should identify ii. Staff Preliminary Assessment
sufficient to meet regional reliability time frames for training, drills and 318. The Staff Preliminary
organization restoration plan review of restoration plan requirements Assessment noted that EOP–006–0
requirements for the transmission to simulate contingencies and prepare requires only that reliability
operator’s area. operators for anticipated and unforeseen coordinators, which are the highest
events. Periodic training, drills and plan authority responsible for overall system
ii. Staff Preliminary Assessment review is necessary to ensure that the restoration, are aware of the restoration
309. Staff noted that, while EOP–005– Reliability Standard effectively plan of each transmission operator in its
0 requires that operators be trained in promotes Bulk-Power System reliability, reliability coordination area, but it does
the implementation of the restoration and specific training and review time not require that they be involved in the
plan, it does not require this to be done frames will enhance the effectiveness of plan’s development or approval. Staff
periodically. In addition, the Reliability the Reliability Standard. also noted that the Reliability Standard
Standard contains Levels of Non- 314. The Commission does not agree does not contain any Measures, metrics
Compliance but no Measures. Staff with Alcoa that the telecommunication or processes to assess compliance with
noted that NERC has not identified this testing requirements in COM–001–0 and its requirements or any Levels of Non-
Reliability Standard as one that would EOP–005–0 can lead to multiple Compliance. Staff acknowledged that
be modified and resubmitted for interpretations regarding compliance. NERC has indicated that the Reliability
Commission approval in November 315. The Commission believes that Standard will be modified to address
2006. new Requirements R9 and R10 included these deficiencies and resubmitted for
in EOP–005–1 would contribute to Commission approval in November
iii. Comments maintaining or enhancing system 2006.
310. MRO comments that EOP–005–0 reliability and therefore proposes to
should identify the timeframes for accept them. iii. Comments
operator training and restoration plan 316. Accordingly, giving due weight 319. NERC states that Requirement R3
review. National Grid comments that to the technical expertise of the ERO of EOP–006–0 requires the reliability
the Staff Preliminary Assessment does and with the expectation that the coordinator to have an area restoration
not offer any specific time interval over Reliability Standard will accomplish the plan. NERC asserts that the reliability
which periodic training of operators purpose represented to the Commission coordinator will have input into the
should occur and that the Commission by the ERO and that it will improve the transmission operators’ restoration
and NERC should work together to reliability of the nation’s Bulk-Power plans to ensure those plans are
establish a balanced training interval System, the Commission proposes to coordinated. NERC acknowledges that
when establishing requirements for approve Reliability Standard EOP–005– there may be merit in requiring
periodic training on restoration plan 0 as mandatory and enforceable. In reliability coordinators to approve the
procedures. addition, pursuant to section 215(d)(5) restoration plans.
311. Alcoa states that two of the FPA and § 39.5(f) of our 320. MRO agrees with staff in that
Requirements of EOP–005–0 either regulations, the Commission proposes to reliability coordinators should be
overlap with or are duplicative of direct that NERC submit a modification required to be involved in the
Requirements contained in other to EOP–005–1 that (1) includes development and approval of
proposed Reliability Standards, in restoration plans. MRO supports the
particular COM–001–0. Alcoa states that 157 Requirement R1 provides that ‘‘[e]ach
inclusion of Measures and Levels of
any overlapping or duplicative Transmission Operator shall have a restoration plan Non-Compliance.
to reestablish its electric system in a stable and
requirements that can lead to multiple 321. Southern submits that the role of
orderly manner in the event of a partial or total

interpretations regarding compliance shutdown of its system, including necessary the reliability coordinator as currently
which could hinder system reliability. operating instructions and procedures to cover established is appropriate and is
Alcoa suggests that the Reliability emergency conditions, and the loss of vital consistent with the role of the reliability
telecommunications channels. Each Transmission
Standard can be improved by defining Operator shall include the applicable elements
coordinator in maintaining reliability. It
minimum requirements relating to the listed in Attachment 1–EOP–005–0 in developing a states that while the reliability
periodic monitoring of restoration plan.’’ coordinator should be aware of the
restoration plan required by the that they can perform their expected reliable operations and to maintain
Reliability Standard, approval of that functions as specified in the overall situational awareness in the event its
plan would have no clear benefit. coordinated regional system restoration control center is no longer operable.
plans.
iv. Commission Proposal ii. Staff Preliminary Assessment
ii. Staff Preliminary Assessment 330. Staff noted that EOP–008–0
322. The Commission agrees with
MRO and NERC that the reliability 325. Staff noted in the Staff requires the applicable entities to have
coordinators should be involved in the Preliminary Assessment that Reliability a backup plan, but it does not
development and approval of the Standard EOP–007–0 lists only the specifically require that backup
restoration plans. The reliability regional reliability organization as the capabilities be provided. The Reliability
coordinator’s position as the highest applicable entity and stated that the Standard does not address requirements
authority responsible for system appropriateness of designating the for independence from the primary
reliability and system restoration regional reliability organization as the control center, provide for prolonged
justifies its involvement in the applicable entity is a concern in the new operation or provide the minimum tools
development and approval of these mandatory Reliability Standard and facilities consistent with the roles,
plans. The Commission thus disagrees structure. responsibilities and tasks of the
with Southern that the reliability different entities to which it applies.
iii. Comments
coordinator’s involvement would have iii. Comments
no clear benefit. The Commission 326. ReliabilityFirst states that the
proposes that the Reliability Standard blackstart procedures developed by the 331. NERC agrees with Commission
be modified to require that the individual regions need to be merged to staff that the proposed Reliability
develop consistent procedures. Standard does not adequately address
reliability coordinator be involved in
327. EEI states that, for the most part, the requirements for backup of critical
the development and approval of
the Reliability Standard involves control center functionality, and it
restoration plans. The Commission also collection management and reporting proposes that such a Reliability
proposes to direct NERC to include requirements, although it notes that Standard should be developed. NERC
Measures and Levels of Non- blackstart generation plans have states that the possible solutions for
compliance. reliability operation implications. MRO providing backup of critical Bulk-Power
323. While the Commission has expresses concern that EOP–007–0 is an System operating functionality are not
identified concerns with regard to EOP– operating function rather than a limited to a redundant control center.
006–0, we believe that the proposal Reliability Standard. MRO states that if Neighboring systems can provide such
serves an important purpose in EOP–007–0 remains a Reliability functionality as contracted services, or
promoting reliability coordination and Standard, it should be revised to require they can be provided through backup
system restoration. Further, the that operating entities have a restoration equipment within a separate existing
proposed Requirements set forth in and blackstart capability plan, and EEI facility.
EOP–006–0 are sufficiently clear and states that it should be redrawn so that 332. EEI supports EOP–008–000 as
objective to provide guidance for compliance obligations are assigned technically sound. It states that the
compliance. Accordingly, giving due directly to those entities that provide Reliability Standard requires
weight to the technical expertise of the the data and other information. In implementation of the plan by defining
ERO and with the expectation that the addition, MRO states that the regional as a Level 4 violation a failure to
Reliability Standard will accomplish the reliability organization should be implement the plan. This clearly
purpose represented to the Commission removed as an applicable entity. establishes that backup capabilities
by the ERO and that it will improve the must exist as reflected in the plan.
reliability of the nation’s Bulk-Power iv. Commission Proposal
According to EEI, entities must have
System, the Commission proposes to 328. Consistent with our discussion in communications facilities that do not
approve Reliability Standard EOP–006– the Common Issues section above, the rely on the primary control center; and
0 as mandatory and enforceable. In Commission will not propose to accept that procedures must be in place for
addition, pursuant to section 215(d)(5) or remand EOP–007–0, as it applies monitoring and controlling critical
of the FPA and § 39.5(f) of our only to regional reliability facilities, and for maintaining voice
regulations, we propose to direct that organizations. The Commission believes communications capability with other
NERC submit a modification to EOP– that, in the long-run, the Regional areas.158
006–0 that: (1) requires that the Entities should be responsible for 333. MRO, ReliabilityFirst and the
reliability coordinator be involved in establishing, maintaining and ISO/RTO Council agree with staff’s
the development and approval of documenting regional blackstart evaluation of EOP–008–0. MRO states
restoration plans; and (2) includes capability plans. However, during the that this Reliability Standard requires a
Measures and Levels of Non- current period of transition, the regional backup plan, but does not address the
Compliance. reliability organizations should requirements for independence from the
h. Establish, Maintain, and Document a continue to perform this role as they primary control center, does not provide
Regional Blackstart Capability Plan have in the past. for prolonged operation, does not
(EOP–007–0) i. Plans for Loss of Control Center provide the minimum tools and
Functionality (EOP–008–0) facilities consistent with the roles,
i. NERC Proposal
responsibilities and tasks of the
324. NERC states that proposed i. NERC Proposal different entities. MRO suggests that
Reliability Standard EOP–007–0, which 329. Proposed Reliability Standard NERC should modify this Reliability
deals with establishing, maintaining and EOP–008–0 deals with plans for loss of Standard accordingly. MRO notes that
documenting regional blackstart control center functionality. It requires today many companies simply have a
capability plans, ensures that the that each reliability coordinator, plan and do not have an actual backup
quantity and location of system transmission operator and balancing
blackstart generators are sufficient and authority have a plan to continue 158 EEI Comments at 10.
facility. It states that the new between cost and reliability benefits, specified in overall coordinated regional
requirements would have to take effect there needs to be some flexibility on system restoration plans.
at some time in the future and that this how the capability is achieved. For
ii. Staff Preliminary Assessment
Reliability Standard needs to make clear example, the mechanism to provide
that the backup site should be capable these capabilities may include building 339. Staff noted in the Staff
of withstanding anticipated disasters, fully redundant physical back up Preliminary Assessment that this
such as the hurricanes in Florida. control centers or, as NERC suggests, Reliability Standard requires that the
ReliabilityFirst states that EOP–008–0 contracting back up control services or start-up and operation of each
should include additional detail on through backup equipment within a generating blackstart unit be tested and
dealing with prolonged primary control separate existing facility. However, the that the results be submitted to the
center inoperability. The ISO/RTO Commission proposes that the extent of regional reliability organization.
Council states that meeting the the backup capability be consistent with However, it does not require that
shortcomings staff identified in EOP– the impact of the loss of the entity’s blackstart units be periodically tested to
008–0 will require identification of primary control center on the reliability ensure that they will be available when
minimum required tools and facilities of the Bulk-Power System. Further, the required to restore the system.
and definition of the appropriate Commission proposes to direct NERC to iii. Comments
entities responsibilities. modify the standard to include a
Requirement that all reliability 340. NERC and other commenters
iv. Commission Proposal point out that Reliability Standard EOP–
coordinators have full backup control
334. Staff raised the concern that centers since they are essential to Bulk- 007–0 requires the routine testing, i.e.,
EOP–008–0 requires the applicable Power System reliability. In addition, minimum testing of one-third of
entities to have a backup plan, but it the Commission is interested in blackstart units each year, suggested by
does not specifically require that backup comments on what other entities should staff.
capabilities be available. EEI comments have full backup centers for reliability iv. Commission Proposal
that the Reliability Standard implicitly such as balancing authorities and large
requires backup capabilities because a 341. The Commission is satisfied with
transmission operators.
Level 4 violation occurs when an entity the explanation of NERC and other
fails to implement such a plan. The 337. While the Commission has commenters that Reliability Standard
Commission disagrees with EEI that identified concerns with regard to EOP– EOP–007–0 requires periodic testing of
such a Requirement can be discerned 008–0, we believe that the proposal blackstart units.
from Level 4 Non-Compliance. As we serves an important purpose in ensuring 342. The Commission believes that
explained in our policy discussion in that applicable entities have a backup the proposal serves an important
Measures and Levels of Non- plan in the case of loss of control center purpose in ensuring adequate blackstart
Compliance, NERC has stated that the functionality. While the Commission generation capability. Further the
‘‘Requirements’’ within a Reliability believes that additional Requirements proposed Requirements set forth in
Standard define what an entity must do are needed, the proposed Requirements EOP–009–0 are sufficiently clear and
to be compliant and establish an set forth in EOP–008–0 are sufficiently objective to provide guidance for
enforceable obligation, and the presence clear and objective to provide guidance compliance. Accordingly, the
or absence of Measures or Levels of for compliance. Accordingly, giving due Commission believes that Reliability
Non-Compliance should not be the sole weight to the technical expertise of the Standard EOP–009–0 is just, reasonable,
determining factor as to whether a ERO and with the expectation that the not unduly discriminatory or
Reliability Standard meets the statutory Reliability Standard will accomplish the preferential, and in the public interest;
test for approval. purpose represented to the Commission and proposes to approve it as mandatory
335. Thus, the Commission believes by the ERO and that it will improve the and enforceable.
that provision for backup capabilities reliability of the nation’s Bulk-Power
System, the Commission proposes to 5. FAC: Facilities Design, Connections,
should be an explicit Requirement. Maintenance, and Transfer Capabilities
Such backup capability, at a minimum, approve Reliability Standard EOP–008–
must: (1) Be independent of the primary 0 as mandatory and enforceable. In a. Overview
control center; (2) be capable of addition, pursuant to section 215(d)(5)
343. The nine Facility (FAC)
operating for a prolonged period of time; of the FPA and § 39.5(f) of our
Reliability Standards address topics
and (3) provide for a minimum set of regulations, we propose to direct that
such as facility connection
tools and facilities to replicate the NERC submit a modification to this
requirements, facility ratings, system
critical reliability functions of the Reliability Standard that includes a
operating limits, and transfer
primary control center.159 The Requirement that provides for backup
capabilities. The standards also
Commission proposes that NERC capabilities, as described above.
establish requirements for maintaining
modify the standard accordingly. In j. Documentation of Blackstart equipment and rights-of-way, including
addition to the three capability Generating Unit Tests Results (EOP– vegetation management.
requirements identified above, the 009–0) 344. How transmission local control
Commission is interested in comments centers are incorporated into the
from industry concerning other specific i. NERC Proposal transmission operator definition will be
capabilities. the same as is described in the COM
338. Proposed Reliability Standard
336. The Commission understands Chapter.
EOP–009–0 deals with documentation
that backup control facilities can be

of blackstart generating unit test results. b. Facility Connection Requirements
costly but, when needed, are essential
NERC states that this Reliability (FAC–001–0)
for reliability. To address the balance
Standard ensures that the quantity and
location of system blackstart generators i. NERC Proposal
159 Facilities
examples include
telecommunications, backup power supplies, are sufficient and that these generators 345. Proposed Reliability Standard
computer systems, and security systems can perform their expected functions as FAC–001–0 is intended to ensure that
transmission owners establish facility post-contingency conditions and is unnecessarily redundant and potentially
connection and performance therefore more rigorous than TPL–001– overbroad because the Reliability
requirements to avoid adverse impacts 0. Standard should not apply to
to the Bulk-Power System. distribution providers that do not own
iii. Comments
generation or transmission facilities. It
ii. Staff Preliminary Assessment 351. NERC comments that, while the explains that, if a distribution provider
346. The Staff Preliminary staff evaluation of FAC–002–0 is valid, owns facilities that are integral to the
Assessment did not identify any issues the Reliability Standard should transmission system, then the
related to this Reliability Standard. nonetheless be approved. NERC offers distribution provider is also a
that it will continue to improve the transmission owner, according to the
iii. Comments
Reliability Standard. Likewise, MRO ‘‘NERC glossary of Terms Used in
347. No specific comments were and ISO/RTO Council agree with staff’s Reliability Standards.’’ Likewise, if a
received. evaluation of FAC–002–0. MRO adds distribution provider owns generating
iv. Commission Proposal that an effort should be made to align or facilities, then the distribution provider
combine the requirements of Order No. is a generator owner. However, if each
348. This Reliability Standard is 2003 and the NERC Reliability load-serving entity provides the
necessary to ensure standard procedures Standards into a single set of standards. transmission owner with its load
and performance assessments for new ISO/RTO Council expresses concern characteristics and the distribution
interconnection facilities. Further, the that the Reliability Standard does not provider does not own integral
Requirements in FAC–001–0 are identify parties responsible for generation or transmission facilities,
sufficiently clear and objective to particular tasks, stating that it should be then MEAG concludes that FAC–002–0
provide guidance for compliance. Thus, reviewed to ensure that tasks are should not apply to such distribution
the Commission proposes to approve correctly assigned. providers.
Reliability Standard FAC–001–0 as just, 352. NERC and others state that
reasonable, not unduly discriminatory Requirement R1 of FAC–002–0 should iv. Commission Proposal
or preferential, and in the public require not only the use of TPL–001–0, 356. The Commission agrees with
interest. but also TPL–002–0, and TPL–003–0. NERC and others that the Reliability
c. Coordination of Plans for New Similarly, ReliabilityFirst believes that Standard should refer not only to TPL–
Generation, Transmission, and End-User FAC–002–0 contains an error in 001, but also to TPL–002–0 and TPL–
Facilities (FAC–002–0) Requirement R1.4. It alleges that the 003–0, which relate to loss of one or
requirement should have been more Bulk-Power System elements. This
i. NERC Proposal translated to refer to standards TPL– would improve the technical soundness
349. Proposed Reliability Standard 001–0 through TPL–004–0 instead of of the Reliability Standard by
FAC–002–0 requires that each only referencing TPL–001–0. Similarly, appropriately broadening the scope of
generation owner, transmission owner, ISO/RTO Council submits that system performance assessments to
distribution provider, load-serving Requirements R1.1 through R1.5 need to include post-contingency conditions. In
entity, transmission planner, and include a reference to standard TPL– addition, such a modification would
planning authority assess the impact of 002–0. achieve greater consistency with Order
integrating generation, transmission, 353. Alcoa points out that No. 2003. Thus, we propose to direct
and end-user facilities into the Requirements R1.1 and R1.2 lack that NERC modify FAC–002–0
interconnected transmission system. metrics. Alcoa asserts that these accordingly.
ii. Staff Preliminary Assessment Requirements are broadly-worded, 357. Requirements R1.1 and R1.2
open-ended and suggest that even a provide that an applicable entity
350. Requirement R1 of FAC–002–0 small addition of facilities would seeking to integrate generation,
requires system performance compel an entity to comply with all of transmission and end-user facilities
assessments in accordance with the Reliability Standards, which might must perform an assessment that
Standard TPL–001–0,160 which relates not otherwise apply. includes: An evaluation of the reliability
only to normal system conditions. Staff 354. CenterPoint contends that impact of the new facilities and their
pointed out that performance coordination cannot be audited with an connections on the interconnected
requirements for new generation objective auditable measure and transmission systems (R1.1) and
interconnection in Order No. 2003 161 recommends that this standard be ‘‘ensurance of compliance with NERC
require assessment for both normal and eliminated. CenterPoint notes tradeoffs Reliability Standards’’ and other
involved in planning interconnections applicable criteria (R1.2). While we
160 Standard TPL–001–0 (Requirement 1 states
for generators can put transmission agree with Alcoa that Requirements
that ‘‘The Planning Authority and Transmission
Planner shall each demonstrate through a valid service providers at risk for either R1.1 and R1.2 lack corresponding
assessment that its portion of the interconnected accusation by the ERO of failing to metrics, we disagree that these
transmission system is planned such that, with all provide adequate facilities or accusation Requirements are overly-broad or open-
transmission facilities in service and with normal
(pre-contingency) operating procedures in effect,
by state commissions of ‘‘gold-plating,’’ ended. Nor do we read Requirement
the Network can be operated to supply projected or not performing proper generation R1.2 as suggesting that even a small
customer demands * * *’’). interconnection planning. CenterPoint addition of facilities would compel an
161 Standardization of Generator Interconnection
adds that although staff has discussed entity to comply with all of the
Agreements and Procedures, Order No. 2003, 68 FR. planning for the most onerous Reliability Standards, which might not
49845 (Aug. 19, 2003), FERC Stats. & Regs. ¶ 31,146
conditions, real-life application of this otherwise apply. Rather, we believe that
(2003), order on reh’g, Order No. 2003–A, 69 FR

15932 at P 89 and 145 (Mar. 26, 2004), FERC Stats. is more complex because it needs to be the Requirements and existing Measures
& Regs. ¶ 31,160 (2004), order on reh’g, Order No. based on the reasoned judgment of set forth in FAC–002–0 are sufficiently
2003–B, 70 FR 265 (Jan. 4, 2005), FERC Stats. & experts considering particular facts as clear and objective to provide guidance
Regs. ¶ 31,171 (2004), order on reh’g, Order No.
2003–C, 70 FR 37661 (June 30, 2005), FERC Stats. opposed to rigid standards. for compliance.
& Regs. ¶ 31,190 (2005); see also Notice Clarifying 355. MEAG asserts that including 358. The Commission disagrees with
Compliance Procedures, 106 FERC 1,009 (2004). distribution providers in FAC–002–0 is CenterPoint’s comments that because
coordination is not readily auditable, reliability of the nation’s Bulk-Power transmission owner reports more than
the Reliability Standard should be System, the Commission proposes to one vegetation-related outage, then
eliminated. The Reliability Standard approve Reliability Standard FAC–002– Level 4 non-compliance has occurred.
specifies the assessments that must be 0 as mandatory and enforceable. In
carried out to demonstrate that facility addition, pursuant to section 215(d)(5)
connections meet reliability of the FPA and § 39.5(f) of our 366. Staff expressed concern that the
performance requirements. Furthermore regulations, the Commission proposes to Reliability Standard does not designate
the Reliability Standard specifies that direct that NERC submit a modification maximum allowable inspection
the assessment studies must be jointly to FAC–002–0 that amends Requirement intervals but, instead, allows each
evaluated by the entities involved and R1.4 to require evaluation of system transmission owner to define its
that evidence of such coordination shall performance under both normal and inspection schedule and maintain its
be provided. Coordination provides contingency conditions by referencing own program. Thus, a transmission
assurance of a fair, equitable and TPL–001 through TPL–003. owner cannot be faulted for the length
comprehensive Interconnection process, of its inspection interval, provided that
which is the basis for open access and d. Transmission Vegetation
Management Program (FAC–003–1) it has defined the schedule in its formal
is required to avoid adverse impacts on program.
reliability. i. NERC Proposal
359. The Commission disagrees with 367. Staff also expressed concern with
363. NERC stated that proposed the Reliability Standard’s development
MEAG’s comment that the inclusion of
distribution providers is redundant and Reliability Standard FAC–003–1 is of a minimum clearance, i.e., the
unnecessary. The NERC definition designed to minimize transmission distance between a wire and the
clearly identifies the role of the outages from vegetation located on or vegetation around it, based on IEEE
distribution provider as providing the near transmission rights-of-way by standard 516–2003 that was developed
‘‘wires’’ connecting the transmission maintaining safe clearances between with the primary purpose of enabling
system to the end use customer. FAC– transmission lines and vegetation, and the performance of safe, energized line
002–0 has a reliability goal of avoiding establish a system for uniform reporting maintenance.163 IEEE 516–2003
adverse impacts on Interconnections, of vegetation-related transmission specifies a 2.45-foot clearance from a
including a number of types of end-user outages. FAC–003–1 applies to live conductor for the 120 kV voltage
facilities. Because the distribution transmission lines operated at 200 kV or class.164 Staff noted that this clearance
provider has responsibility at the higher voltage (and lower-voltage is lower than that specified by relevant
interface between the transmission and transmission lines which have been U.S. safety codes such as the ANSI Z–
distribution system, it is proper that deemed critical to reliability by a 133 standard, which specifies 12-feet, 4-
FAC–002–0 include Requirements to regional reliability organization). The inches as the approach distance for the
address those responsibilities. Reliability Standard requires each 115 kV voltage class.165
360. The Commission agrees with the transmission owner to have a
368. Staff expressed concern that use
ISO/RTO Council that the Reliability documented vegetation management
of the IEEE clearance provision as a
Standard does not identify functional program in place, including records of
basis for minimum clearance may not be
entities responsible for specific tasks. its implementation. Each program must
appropriate, and adopting it for use with
The Commission understands that the be designed for the geographical area
regular maintenance practices in
roles and responsibilities of the and specific design configurations of the
vegetation management may be a
transmission planner and planning transmission owner’s system.
‘‘lowest common denominator’’
authority in carrying out the tasks are in 364. This Reliability Standard
approach. In addition, use of IEEE
accordance with the definitions in the requires a transmission owner to define
Standard 516–2003 could create the
NERC glossary. Since the Commission a schedule for and the type (aerial or
unintended consequence that some
has previously approved the division of ground) of right-of-way vegetation
transmission owners that currently
responsibilities in various tariffs, the inspections. In addition, it requires a
maintain more stringent vegetation
exact delegation of individual tasks is transmission owner to determine and
management programs based on
better placed in the procedures manuals document the minimum allowable
standards such as the ANSI Z–133 may
than in the Reliability Standard. clearance between energized conductors
relax their practices to meet the less-
361. While the Commission has and vegetation before the next trimming,
stringent minimum requirement set
identified concerns with regard to FAC– and it specifically provides that
forth in the NERC vegetation
002–0, we believe that the proposal ‘‘Transmission-Owner-specific
management standard FAC–003–1. Staff
serves an important purpose in ensuring minimum clearance distances shall be
questioned whether the Reliability
that generator owners, transmission no less than those set forth in the
Standard sufficiently addresses
owners and end-users meet facility Institute of Electrical and Electronics
Recommendation No. 16 of the Blackout
connection and performance Engineers (IEEE) Standard 516–2003
Report to establish ‘‘enforceable
requirements. We note that the (IEEE Guide for Maintenance Methods
standards for maintenance of electrical
Reliability Standards contains Measures on Energized Power Lines).’’ 162
clearances in right-of-way areas.’’ 166
and Levels of Non-Compliance. Further, 365. Compliance with this standard is
the proposed Requirements set forth in measured against four Levels of Non- 163 Institute of Electrical and Electronics
this Reliability Standard are sufficiently Compliance. Levels 1 and 2 relate to Engineers, Inc. Standard 516–2003, IEEE Guide for
clear and objective to provide guidance documentation. Level 3 non-compliance Maintenance Methods on Energized Power Lines at
for compliance. occurs if a transmission owner reports 1 (July 29, 2003) (IEEE 516–2003).
362. Accordingly, giving due weight one incident of vegetation-related 164 Id. at 20.
to the technical expertise of the ERO outage in a calendar year due to 165 ANSI Z133, American National Standards
and with the expectation that the Institute Standard for Tree Care Operations—
vegetation grow-ins from inside or Pruning, Trimming, Repairing, Maintaining and
Reliability Standard will accomplish the outside the right of way. If the Removing Trees, and Cutting Brush—Safety
purpose represented to the Commission Requirements.
by the ERO and that it will improve the 162 Standard FAC–003–1 (Requirement R1.2.2). 166 Blackout Report at 154.
iii. Comments consider additional clearance for the interval within a Regional Entity that is
369. NERC contends that FAC–003–1 dynamic movement of the transmission geographically diverse.
is an excellent standard that sets conductors to avoid vegetation related 374. Performance measure: NERC
appropriate requirements for managing outages. According to CenterPoint, the states that no vegetation-related
vegetation in transmission rights-of- derived values from the IEEE table serve transmission line outage can occur
way. NERC and other commenters only as a theoretical minimum for static without also being a violation of the
address four key issues: (1) Adequacy of situations. standard. NERC expresses the view that,
minimum clearances; (2) the need to 372. Conversely, ReliabilityFirst if such outages do occur, the
specify maximum inspection intervals; submits that it agrees with staff’s transmission owner has violated the
(3) no vegetation-related outage can evaluation of standard FAC–003–1 standard, and the solution is to engage
occur without also violating the regarding the appropriateness of using in compliance enforcement actions
proposed Reliability Standard; and (4) the IEEE standard. SCE believes that the rather than developing a wider margin
cost impact of expanding the minimum adoption of IEEE 516–2003 in FAC– of clearance. Several commenters
clearances. 003–1 to establish ‘‘specific radial concur with NERC on this point and
370. Adequacy of minimum assert that staff’s concerns with regard
clearances to be maintained between
clearances: NERC explains the adoption to maximum inspection intervals and
vegetation and conductors under all
of minimum clearance distances based minimum clearances would not be an
rated electrical operating conditions’’ is
on the standard IEEE 516–2003 is issue if a vegetation management
appropriate because, even though the wholly inappropriate when determining
minimum tree-to-line clearances. SCE standard measured and used
standard was originally developed for performance as a metric.171 Southern
live line workers, ‘‘its engineering basis states that no scientific evidence was
ever presented or cited during the NERC points out that FAC–003–1 utilizes
applies electric flashover physics that
standard development process that outage reporting to measure the
apply to flashover conditions between
demonstrated vegetation represented a effectiveness of an entity’s vegetation
an energized conductor and a grounded
greater or equal flash-over hazard in management program and suggests that
object, such as a tree.’’ 167 NERC adds
comparison to the human body (i.e., a the performance metric will expose the
that the minimum clearances identified
in the standard are the ‘‘second’’ qualified electrical worker) when placed standard’s shortcomings which can then
clearance requirement.168 In the first in proximity to transmission lines. SCE be addressed through a revision of the
instance, a transmission owner must recommends that NERC establish a new standard.
develop wider clearances when minimum clearance for transmission 375. Cost of compliance: Finally,
accounting for vegetation growth, line lines operated at 200 kV and above and NERC and others express concern that
dynamics and other conditions between that studies be conducted so that these expanding the minimum clearances
the times of tree pruning. new minimum clearances be based on could increase workload and costs yet
371. Similar to NERC’s view on the real-world knowledge and line clearing not provide any added reliability
adequacy of minimum clearances, expertise, as opposed to simply benefit. Regarding the issue on
several commenters argue that the IEEE appropriating standards that were increased costs to maintain greater
516–2003 standard is an appropriate designed for other situations. minimum clearances versus reliability
standard for use in FAC–003–1.169 373. Inspection Cycle: With regard to benefits, EEI points out that ‘‘flexibility
Southern indicates that full compliance a maximum allowable inspection cycle, written into the standard recognizes that
with this standard would help to ensure fixed clearance distances will not
NERC believes FAC–003–1
line reliability consistent with the provide stronger protection of the grid,
appropriately provides discretion to
purposes of this standard and therefore and are certain to cause significant
transmission owners to develop
believes the use of the IEEE standard is additional costs,’’ yet recognizes the
vegetation inspection cycles appropriate
appropriate for use as a minimum need to prevent cost-based incentives
for their respective systems. Several
acceptable clearance in this context. which might drive the Reliability
CenterPoint states that ‘‘clearance 2,’’ commenters argue that staff’s concern
that FAC–003–1 does not designate Standard toward a lowest common
i.e., the minimum distance in FAC–003– denominator.172
1, must be maintained under all rated maximum allowable inspection
electrical operating conditions and must intervals fails to recognize varying types 376. USDA Forest Service expresses
of vegetation, growth rates and climates concern with regard to the manner in
167 NERC Comments at 31. throughout North America.170 Some which the requirements of EPAct 2005
168 ‘‘Clearance 1’’ is the clearance distance commenters consider staff’s comment are being applied. In particular, utilities
between vegetation and a transmission line to be on maximum allowable inspection are submitting vegetation management
achieved at the time of vegetation management intervals as a ‘‘one size fits all’’ standards to the Commission for use on
work, and ‘‘clearance 2’’ is the minimum clearance
distance between vegetation and a transmission line approach to vegetation management and National Forest System lands that were
to be achieved at all times. FAC–003–1 defines advise that such an approach to not first approved by the USDA Forest
‘‘clearance 2’’ in Requirement R1.2.2 as ‘‘The inspection intervals could result in the Service. It adds that it objects to any
Transmission Owner shall determine and document
specific radial clearances to be maintained between
lowest common denominator among all process that allows a utility to set its
vegetation and conductors under all rated electrical regions throughout the country or own new vegetation management
operating conditions. These minimum clearance unfairly punish or financially burden standards independently and to any
distances are necessary to prevent flashover certain regions. Allegheny proposes as interpretation of EPAct 2005 that would
between vegetation and conductors and will vary
due to such factors as altitude and operating an alternative that maximum inspection diminish the USDA Forest Service’s
intervals could vary between Regional authority to approve new vegetation
voltages. These Transmission Owner-specific

minimum clearance distances shall be no less than Entities and notes that there might need management standards on Forest
those set forth in the [IEEE] Standard 516–2003 Service lands.
* * * and as specified in its Section 4.2.2.3,
to be variations of the maximum
Minimum Air Insulation Distances without Tolls in
the Air Gap.’’ 170 E.g., Allegheny, CenterPoint, EEI, MRO, 171 E.g., CenterPoint, National Grid, ISO/RTO
169 E.g., EEI, Mid-American, National Grid, National Grid, NRECA, NYSPUC, SCE, and Council and Southern.
NRECA, PG&E, and Southern. Southern. 172 EEI Comments at 8.
iv. Commission Proposal ‘‘if standard atmospheric conditions do 161 entities surveyed conduct ground
377. Giving due weight to the not exist, extra care must be taken.’’ 176 inspections once a year.179 This
technical expertise of the ERO and with 380. NERC’s comments, IEEE 516– indicates that a one-year vegetation
the expectation that the Reliability 2003, and the vegetation management inspection cycle is the ‘‘norm’’ for the
Standard will accomplish the purpose standard itself all make clear that the industry, but not a lowest common
represented to the Commission by the minimum ‘‘clearance 2’’ distances based denominator that sets a standard less
ERO and that it will improve the on IEEE 516–2003 are adequate in some, stringent than the industry practice.
reliability of the nation’s Bulk-Power but not all, circumstances. The While the Commission will not dictate
System, the Commission proposes to minimum clearances that a transmission a minimum vegetation inspection cycle,
approve Reliability Standard FAC–003– owner must identify and document we do believe that it is important that
1. In addition, pursuant to section depend on a variety of conditions the ERO develop a minimum
215(d)(5) of the FPA and § 39.5(f) of our including, but not limited to, requirement as a ‘‘backstop’’ to assure
regulations, the Commission proposes to transmission line voltage, temperature, that transmission owners conduct
modify the Reliability Standard, as wind velocities, altitude. Accordingly, inspections at a reasonable interval.
discussed below. we interpret the FAC–003–1 to require Accordingly, we propose to direct that
trimming that is sufficient to prevent the ERO modify the Reliability Standard
(a) Adequacy of Minimum Clearances outages due to vegetation management to establish a minimum vegetation
378. NERC and others support the practices under all applicable inspection cycle.
proposed minimum ‘‘clearance 2’’ conditions.177 384. Further, as mentioned above, the
distances based on IEEE 516–2003 as 381. In response to the USDA Forest Commission believes that some
appropriate for use in vegetation Service’s comments, we believe that any variation to a continent-wide, one year
management. The Commission believes potential issues regarding minimum minimum cycle should be allowed due
that clearance distances need to exceed clearances on National Forest Service to physical differences such as climate
IEEE 516–2003’s requirements in many lands should be dealt with on a case-by- and species of vegetation. Appropriate
circumstances, but should never be less case basis. The Commission seeks variations may be determined on a
than these requirements. The comments whether another approach regional basis, with FAC–003–1
Commission is concerned that the would be more appropriate. providing a continent-wide ‘‘backstop.’’
application of the IEEE requirement Alternatively, the continent-wide
(b) Inspection Intervals standard could specify a one-year
without consideration of specific
382. NERC and other commenters minimum inspection cycle, and provide
circumstances may result in flashovers,
believe FAC–003–1 appropriately that exemptions would be granted by
and this possibility appears to be
provides discretion to transmission the ERO for legitimate physical
addressed in IEEE 516–2003 and the
owners to develop vegetation inspection differences. The most appropriate
vegetation management standard.
cycles appropriate for their respective approach could be determined in the
Specifically, FAC–003–1 provides that a
systems. While the Commission ERO Reliability Standard development
transmission owner must ‘‘identify and
recognizes that some variation in process.
document clearances between
inspection cycles would be appropriate 385. The applicability of FAC–003–1
vegetation and [conductors] taking into
based on climate and other factors, we currently states that it applies to all
consideration transmission line voltage,
are concerned that the complete transmission lines operated at 200 kV
the effects of ambient temperature on
discretion left to the transmission and above and to any lower voltage
conductor sag under maximum design
owners in determining inspection cycles lines designated by the regional
loading, and the effects of wind reliability organization as critical to
limits the effectiveness of the Reliability
velocities on conductor sway.’’ 173 In reliability. The Commission is
Standard.
addition, the Reliability Standard 383. While the Commission will not concerned that the bright-line
provides: dictate a specific minimum vegetation applicability threshold of 200 kV will
The Transmission Owner shall determine inspection cycle, based on data exclude a significant number of
and document specific radial clearances to be provided by transmission owners to the transmission lines that could impact
maintained between vegetation and Commission in 2004 as part of the Bulk-Power System reliability. Although
conductors under all rated electrical
operating conditions. These minimum Commission’s vegetation management the regional reliability organizations are
clearance distances are necessary to prevent survey, it appears that a one-year given discretion to designate lower
flashover between vegetation and conductors vegetation inspection cycle is voltage lines under the proposed
and will vary due to such factors as altitude reasonable.178 According to the Reliability Standard, we are concerned
and operating voltages.’’ 174 Vegetation Management Report, 76 of that this approach will not result in the
379. Consistent with the notion that inclusion of all transmission lines that
the minimum clearance may vary due to 176 IEEE 516–2003 at 20. Further, IEEE 516–2003 could impact Bulk Power System
various factors, NERC states that the
defines ‘‘standard atmospheric conditions’’ as reliability. Accordingly, the
temperatures above freezing, wind less than 24 Commission proposes to direct NERC to
transmission owners must develop kilometer per hour, unsaturated air, normal
wider clearances when accounting for barometer, uncontaminated air, and clean and dry change the applicability of FAC–003–1
vegetation growth, line dynamics and insulators.’’ so that it applies to Bulk-Power System
other conditions between the times of
177 Nothing in this Reliability Standard should be transmission lines that have an impact
interpreted as preempting the authority and of reliability as determined by the ERO.
tree pruning.175 In addition, IEEE 516– responsibility of the states to set and enforce
2003 makes clear that the stated minimum clearances, such as those delineated in
386. While we have expressed some
concerns regarding FAC–003–1, we
minimum clearances are based on the National Electric Safety Code, to protect the
safety of the public.
‘‘standard’’ atmospheric conditions and 178 The data provided in the survey was used to 179 Id. at 11. The Vegetation Management Report
prepare a report to Congress, Federal Energy indicates that 29 entities conduct ground
173 FAC–003–1, Requirement R1.2. Regulatory Commission, Utility Vegetation inspections semi-annually or more frequently, 37
174 FAC–003–1, Requirement R1.2.2 (emphasis Management and Bulk Electric Reliability Report, entities inspect less frequently than annually, 12
added). (September 7, 2004) (Vegetation Management inspect on an ‘‘as needed’’ basis, and seven entities
175 NERC Comments at 32. Report). did not report on their inspection cycle.
believe that it serves an important goal transmission planners, and planning facilities because the facility owner has
of improving the reliability of the Bulk- authorities who have responsibility in invested in the equipment and is
Power System by preventing outages the same areas where the facilities are responsible for maintaining the
from vegetation. Further, with our located for inspection and technical warranty, the equipment’s performance,
interpretation above regarding reviews. and ultimately replacement costs. If
minimum clearances, the Commission ratings are uniform and outside a
believes that the proposed Requirements facility owner’s control, NERC questions
set forth in FAC–003–1 are sufficiently 390. Staff noted that this Reliability who would be responsible for
clear and objective to provide guidance Standard does not establish or require a equipment failures. Uniform rating
for compliance. uniform or consistent set of methods might also lead to a reduction
387. Accordingly, giving due weight methodologies, which has resulted in in limits on facilities and, consequently,
to the technical expertise of the ERO different ratings for the same equipment reduced capacity of the transmission
and with the expectation that the under the same conditions in the same network. Several commenters, including
Reliability Standard will accomplish the region. Rather, it only requires an NERC, agree with staff that regardless of
purpose represented to the Commission equipment owner to document the how ratings are developed, jointly-
by the ERO and that it will improve the methodology it chooses to use. Thus, owned facilities must use the same
reliability of the nation’s Bulk-Power staff was concerned that FAC–008–1 ratings.
System, the Commission proposes to does not appear to address 393. Allegheny disagrees with staff’s
approve Reliability Standard FAC–003– Recommendation No. 27 of the Blackout evaluation of standard FAC–008. It
1. Further, pursuant to section 215(d)(5) Report that NERC develop ‘‘clear, comments that the industry does not
of the FPA and § 39.5(f) of our unambiguous requirements for the consider the absence of a standard
regulations, we propose to direct that calculation of transmission line methodology for determining facility
NERC submit a modification to FAC– ratings.’’ 180 ratings a threat to the reliability of the
003–1 that: (1) The ERO develop a iii. Comments transmission grid and that the
minimum vegetation inspection cycle establishment of a uniform standard
391. NERC comments that will be a massive and costly
that allows variation for physical strengthening the consistency of the
differences, as discussed above; and (2) undertaking. Allegheny explains that,
underlying assumptions and methods historically, generator owners and
removes the applicability to used to determine the ratings of
transmission lines operated at 200 kV transmission owners rely on
facilities could improve the standard; manufacturer-provided equipment
and above so that the Reliability however, NERC cautions that a single,
Standard applies to Bulk-Power System ratings, in conjunction with their
uniform method for ratings calculations respective business practices, to ensure
transmission lines that have an impact will not be practical or effective. This
of reliability as determined by the ERO. consistent documentation and
concern is echoed by ReliabilityFirst. application of ratings to ensure
e. Methodologies for Determining NERC explains that the rating of reliability. Further, monitoring by
Electrical Facilities (FAC–004–0) and facilities is very complex, beginning regional organizations has also ensured
Electrical Facility Ratings for System with the fact that each physical device that generator and transmission owners’
Modeling (FAC–005–0) has its own unique design criteria and practices address reliability concerns. In
limitations, which are incorporated into light of this, Allegheny advocates that
388. NERC’s August 28, 2006 the device’s warranty. The facility
Supplemental Filing states that staff’s recommendations not be adopted
owner risks voiding the warranty or without further demonstration that the
Reliability Standards FAC–004–0 and damaging the physical device if it is
FAC–005–0 were filed for approval on benefits justify the cost.
operated outside of the manufacturer 394. PG&E asserts that FAC–008–1
April 4, 2006, but have been superseded ratings. The second consideration is the appropriately balances the need for
by FAC–008–1 and FAC–009–1, configuration of the equipment within consistent facility ratings with the
respectively. NERC has withdrawn its the power system. A facility owner realities of the transmission system and
request for approval of FAC–004–0 and examines the equipments’ limitations that a single line rating methodology for
FAC–005–0. Thus, the Commission will and uses engineering judgment to apply all of North America is neither practical
not address them in this notice of a variety of assumptions and practices nor advisable. It explains that the
proposed rulemaking. in creating the design criteria for Reliability Standard properly places the
f. Facility Ratings Methodology (FAC– operational facilities. NERC agrees that responsibility of determining facility
008–1) it is at this step where practices could ratings with the facility owners. PG&E
be more consistent. However, it adds believes the Reliability Standard’s
i. NERC Proposal
that differences in assumptions and disclosure requirement safeguards
389. The stated purpose of FAC–008– practices arise from site-specific against manipulation of facility ratings.
1 is to ensure that facility ratings used characteristics such as climate 395. Mid-American and MRO agree
in the reliable planning and operation of conditions, local equipment safety that a consistent methodology should be
the bulk electric system are determined codes, or life expectancy of the established for equipment rating. Mid-
based on an established methodology. It equipment, and that when the standards American believes that the standard
requires that each transmission owner were developed, participants strongly should encourage a consistent
and generation owner develop a facility agreed that uniform methods were not methodology for calculating equipment
rating methodology for their facilities, appropriate or feasible. ratings, ensure transmission customers
which should consider manufacturing 392. NERC points out that there are of nondiscriminatory treatment without
data; design criteria (such as IEEE, ANSI trade-offs to uniform ratings methods. being overly burdensome to the facility
and other industry standards); ambient Currently, a facility owner assumes a owner, and must address all factors that
conditions; operating limitations; and business risk associated with the affect equipment ratings. However, Mid-
other assumptions. This methodology is assumptions used in the rating of American does not support an overly-
to be made available to reliability prescriptive standard. It suggests that
coordinators, transmission operators, 180 Blackout Report at 162. staff’s concerns should be directed at
ensuring consistent methodologies for ‘‘lowest common denominator’’ result. Grid. Likewise, the Valley Group raises
rating development, however, points out To correct this problem, the Valley legitimate concerns about manipulation
that a consistent methodology may still Group encourages adoption of IEEE/ of the assumptions, in particular wind
result in differing numerical ratings due CIGRE guidelines for selection of speed, demonstrating the need not only
to differing ambient temperatures, sag weather parameters.182 for uniformity, but for oversight as well.
conditions, etc., that may exist in 399. Alcoa agrees with staff’s 403. The Commission believes that, to
differing regions. While supporting evaluation of the facility Reliability address the concerns of National Grid,
staff’s recommendation for a consistent Standards. It adds that, without a clear Valley Group and others, the Reliability
methodology, MRO disagrees with set of straightforward methodologies for Standard could be improved in two
staff’s approach. Transmission owners facility ratings, the proposed ways. First, we propose that the
should be able to set facility ratings as documentation requirements are unduly different assumptions that are the basis
they see fit, provided the rating is burdensome. Alcoa suggests that the for the input variables should be
communicated to others and the ERO propose methodologies that documented and made available for
transmission owners operate with the consider the relative importance to the review by other users, owners and
same rating. reliability of the Bulk-Power System, as operators of the Bulk-Power System.
396. National Grid comments that it well as the ability of the owner of the Currently, only a subset of functional
supports some measure of facilities to pass on the costs incurred to entities responsible for the facilities in
standardization of equipment rating enhance reliability to those receiving a specific area are able to view this
methodologies. It explains that, ‘‘if left the benefit. information. The added transparency
entirely to the asset owners, the lack of that we propose would allow customers,
uniform equipment rating regulators and other affected users,
methodologies leaves open the 400. The Commission proposes to owners and operators of the Bulk-Power
possibility in some circumstances that approve FAC–008–1 as mandatory and System to understand how a facility
the determination of facility ratings can enforceable. In addition, we propose owner sets its facility ratings.
be used by an asset owner to gain a directing that NERC develop 404. Second, asset owners use various
market edge over other market modifications to the Reliability methods for calculating ratings that are
participants that do not own assets.’’ 181 Standard, as discussed below. widely accepted throughout the
National Grid encourages the 401. The Commission agrees with industry, such as IEEE and CIGRE, to
standardization of facility ratings only at NERC and others that the assumptions calculate transmission line conductor
a conceptual level, though not used in the methodologies can not be ratings. While not proposing to mandate
necessarily the standardization of standardized. The assumptions are a particular methodology, we do
specific parameters, recognizing essentially input variables into rating propose that the methodology chosen by
regional climatic and topological methodologies used to convert the input a facility owner be consistent with
conditions. into the normal and emergency ratings industry standards developed through
397. CenterPoint contends that of the facilities. Owners will use the an open process such as IEEE or CIGRE.
Reliability Standards FAC–004–0, FAC– actual topology and substation 405. Further, consistent with NERC’s
005–0, FAC–008–1 and FAC–009–1 are arrangement of the facilities in comments,184 the Commission proposes
not necessary and should be rejected. It configuring equipment for facility that the limiting component(s) be
explains that Blackout Report ratings. There should be different input identified and that the increase in rating
Recommendation No. 27 does not variables such as the ambient based on the next limiting component(s)
require a uniform set of methodologies temperatures in Texas as compared to be defined for all critical facilities,
for rating facilities, but instead only Maine. Thus, we are not proposing to including facilities that limit TTC, limit
recommends that there be clear, require a ‘‘uniform method of ratings delivery of generation to load, or bottle
unambiguous requirements to rate calculation,’’ which would standardize generation. This would provide
transmission lines. According to the input assumptions in the formula for additional transparency and sufficient
CenterPoint, most if not all utilities calculating ratings. information so that the most cost
follow a standard IEEE method for 402. On the other hand, the effective solutions to increase facility
rating transmission lines. Commission disagrees with MRO that ratings can be identified. For example,
398. The Valley Group proposes that transmission owners ‘‘should set the if a specific transmission line is limited
the fastest and most efficient way to rating as they see fit, provided that by the relay settings or protective relay
fulfill Blackout Report Recommendation everyone knows what the rating is and system, ordinarily the line could be ‘‘up
No. 27 would be the adoption of the that rating is used for all purposes rated’’ for a relatively modest cost. As a
principles of the International Council including the Transmission Owner’s use second example, if a line is limited by
on Large Electric Systems (CIGRE)/IEEE of the facilities.’’ 183 As explained by the sag of one particular span,
Guide and the necessary procedures for National Grid, allowing facility owners modifying the tension in that span, even
enforcement. The Valley Group cites to set ratings ‘‘as they see fit’’ could if it requires reinforcing a few towers,
survey data indicating that a large result in the use of a facility rating may result in significant increases in
percentage of utilities have increased determination to gain a competitive capability at relatively low cost. Such
their facility ratings by changing certain advantage over other market information would be useful to users of
ratings assumptions, most commonly by participants that do not own assets. This the Bulk-Power System and to the
increasing the assumed wind speed. It could harm the reliability of the Commission.
views this as a dangerous trend because transmission grid and can also impact 406. CenterPoint has not provided a
system loads have generally increased competition as described by National compelling reason for us to reject this
during the same period. It also sees the Reliability Standard. Assuming
182 The Valley Group cites a CIGRE Technical
regional adoption of assumptions being CenterPoint is correct that most, if not
Brochure entitled Guide for Selection of Weather
based on utilities with the least Parameters for Overhead Bare Conductor Ratings
all, utilities follow a standard method
conservative practices, leading to a published in August 2006 and a CIGRE/IEEE for rating transmission lines, that fact
Tutorial, which was presented in June 2006.
181 National Grid Comments at 19. 183 MRO Comments at 8. 184 See NERC Comments at 61.
does not obviate the need for mandatory ratings methodology and provide those capabilities may vary for different
and enforceable Reliability Standards ratings to their reliability coordinator, regions of the Eastern Interconnection
that require clear, ambiguous transmission operator, transmission due to geography, system design,
requirements to rate transmission lines. planner, and planning authority. weather, or state-specific requirements.
Moreover, industry use of a standard Transparency in the approach and
line rating method may be a result of the assumptions is essential.
Reliability Standard, which requires 410. The Staff Preliminary 416. PG&E comments that the
facility owners to consider industry Assessment did not identify any issues inherent differences in the development
rating practices such as IEEE. Moreover, related to this Reliability Standard. of the transmission infrastructure
the Reliability Standards include ratings iii. Comments between the Eastern Interconnection
for all facilities, not just transmission and the Western Interconnection weigh
lines. 411. ReliabilityFirst agrees with staff’s against the imposition of a single
407. FAC–008–1 makes considerable evaluation that FAC–009–1 does not methodology. Because transmission
progress in addressing Blackout Report contain any substantive issues. lines tend to be located in common
Recommendation No. 27, which as iv. Commission Proposal corridors in the Western
noted above recommends that NERC Interconnection, efficiency and
412. FAC–009–1 serves an important reliability are maximized by transfer
develop clear and unambiguous reliability purpose of ensuring that
requirements for the calculation of capabilities calculated with
facility ratings are determined based on consideration of selected multiple
transmission line ratings. While the an established methodology. Further,
Commission has identified ways to contingencies to account for the
the proposed Requirements set forth in multiplicity of potential credible events.
improve and strengthen this Reliability FAC–009–1 are sufficiently clear and
Standard, we believe that the proposal 417. CenterPoint proposes that FAC–
objective to provide guidance for 012–1 be consolidated with FAC–013–1.
serves an important purpose in ensuring compliance. Accordingly, the
that facility ratings are determined Further, it advocates that, because the
Commission proposes to approve ERCOT region operates as a single
based on an established methodology. Reliability Standard FAC–009–1
Further, the Commission believes that control area and thus does not have
(Establish and Communicate Facility transfers between control areas, the
the proposed Requirements set forth in Ratings) as just, reasonable, not unduly
FAC–008–1 are sufficiently clear and NERC transfer capability methodology is
discriminatory or preferential, and in not used, nor should it be.
objective to provide guidance for the public interest.
compliance. iv. Commission Proposal
408. Accordingly, giving due weight h. Transfer Capability Methodology
418. As the methodology to calculate
to the technical expertise of the ERO (FAC–012–1)
transfer capability used by a reliability
and with the expectation that the i. NERC Proposal coordinator or planning authority has
Reliability Standard will accomplish the not been submitted to the Commission,
purpose represented to the Commission 413. Proposed Reliability Standard
FAC–012–1 requires each reliability it is not possible to determine at this
by the ERO and that it will improve the time whether FAC–012–1 satisfies the
reliability of the nation’s Bulk-Power coordinator and planning authority to
document their methodology used to statutory requirement that a proposed
System, the Commission proposes to Reliability Standard be ‘‘just,
approve Reliability Standard FAC–008– develop inter-regional and intra-regional
transfer capabilities. This methodology reasonable, not unduly discriminatory
1 as mandatory and enforceable. In or preferential, and in the public
addition, pursuant to section 215(d)(5) must describe how it addresses
transmission topology, system demand, interest.’’ Accordingly, the Commission
of the FPA and § 39.5(f) of our will not propose to accept or remand
regulations, the Commission proposes to generation dispatch, and use of
projected and existing commitment of this Reliability Standard, until the
direct that NERC submit a modification regional procedures are submitted. In
to FAC–008–1 that requires transmission.
the interim, compliance with FAC–012–
transmission and generation facility ii. Staff Preliminary Assessment 1 should continue on its current basis,
owners to: (1) Document underlying and the Commission considers
414. Staff noted that a move toward
assumptions and methods used to compliance with the Reliability
standardization of the inter-regional and
determine normal and emergency Standard to be a matter of good utility
intra-regional transfer capability may be
facility ratings; and (2) develop facility practice.
desirable to ensure an adequate level of
ratings consistent with industry 419. Although we do not propose any
reliability and minimize undue negative
standards developed through an open action with regard to FAC–012–1 at this
impact on competition.
process such as IEEE or CIGRE; and (3) time, we address comments and our
identify the limiting component(s) and iii. Comments additional concerns regarding this
define for all critical facilities the 415. Responding to staff’s suggested Reliability Standard below.
increase in rating based on the next move toward standardization, MRO 420. We agree with MRO and PG&E
limiting component(s). comments that the Reliability Standards that different regions or
g. Establish and Communicate Facility should recognize the differences in Interconnections may have different
Ratings (FAC–009–1) geographical diversity, as well as geography, population size, or
relative population size, to maintain transmission structure that necessitate
i. NERC Proposal reliability. A single approach is different approaches to transfer
409. The stated Purpose of FAC–009– desirable, but it should provide the capability, and we have noted that the
1 is to ensure that facility ratings are flexibility to adjust for technical Requirement R1.3 addresses issues such
determined based on an established realities within a given part of the as transmission system topology and
methodology. It requires each Eastern Interconnection. It explains that current and projected use of
transmission owner and generation the assumptions underlying transmission system for reliability
owner to establish facility ratings methodologies for determining inter- margin but not for transfer capability
consistent with their associated facility regional and intra-regional transfer calculation. FAC–012–1 only requires
that the regional reliability organization regional reliability organization), and a group.187 Reliability Standards INT–
provide documentation on transfer planning authority (as required by its 001–1, INT–003–1 and INT–004–1
capability methodology and provide this regional reliability organization). The replace the corresponding Version 0
documentation to entities such as Commission believes that the Reliability standards although, as discussed later
transmission planner, planning Standard should be applicable to all on, the language of some Requirements
authority, reliability coordinator, and Reliability Coordinators. A planning have been modified and other
transmission operator. The Reliability authority may also have a role in Requirements have been transferred
Standard does not contain clear determining transfer capabilities, elsewhere. NERC states that Reliability
requirements on how transfer capability however, the regional reliability Standard INT–002–0 is being retired,
should be calculated, which has organization should not be the entity effective January 1, 2007 and asked that
resulted in diverse interpretations of that makes this determination. it be withdrawn for Commission review.
transfer capability and the development Reliability Standards INT–005–1
426. Accordingly, giving due weight
of various calculation methodologies.185 through INT–010–1 are new to the
to the technical expertise of the ERO Version 1 Reliability Standards.
We believe that this Reliability Standard and with the expectation that the
should, as a minimum, provide a Reliability Standard will accomplish the i. General Comments
framework for the transfer capability
purpose represented to the Commission 429. CenterPoint comments that the
calculation methodology including data
by the ERO and that it will improve the INT group of proposed Reliability
inputs, and modeling assumptions. We
reliability of the nation’s Bulk-Power Standards should be rejected because
seek comments on the most efficient
System, the Commission proposes to Reliability Standards that attempt to
way to make the above information
approve Reliability Standard FAC–013– create auditable requirements to
transparent for all participants.
421. With regard to CenterPoint’s 1 as mandatory and enforceable. In measure ‘‘coordination’’ cannot
comment, while FAC–012, which addition, pursuant to section 215(d)(5) realistically be implemented and are
pertains to the documentation of of the FPA and § 39.5(f) of our unnecessary appendages to Reliability
transfer capability methodologies, and regulations, the Commission proposes to Standards addressing the actual goal of
FAC–013, which pertains to the direct that NERC submit a modification ensuring reliable operation. CenterPoint
establishment of transfer capabilities to FAC–013–1 that: (1) Makes it also contends that, if the Commission
consistent with the methodology, are applicable to all reliability coordinators; approves the INT group of Reliability
related, we leave it to NERC’s discretion and (2) removes the regional reliability Standards, ERCOT should be explicitly
whether they should be consolidated. organization as the entity that exempted from them because
As we have mentioned elsewhere, determines whether a planning interchange tagging is not used in
CenterPoint’s suggestion that the authority has a role in determining ERCOT.
transfer capabilities. 430. ReliabilityFirst comments
Reliability Standard not apply to the
generally on the INT group of Reliability
ERCOT region must be submitted by 6. INT: Interchange Scheduling and Standards. It states that the
NERC as a regional difference. Coordination development of missing compliance
i. Establish and Communicate Transfer a. Overview elements by NERC’s drafting team must
Capability (FAC–013–1) be expedited and that it may be
427. The Interchange Scheduling and necessary to supplement the team with
i. NERC Proposal
Coordination (INT) group of Reliability additional experts if it is necessary to
422. Proposed Reliability Standard Standards addresses the process of expand and/or detail requirements in
FAC–013–1 requires each reliability Interchange Transactions, which occur these Reliability Standards.
coordinator and planning authority to when electricity is purchased and
calculate transfer capabilities consistent ii. Commission Proposal
transmitted from a seller to a buyer
with its transfer capability methodology across the power grid.186 Specific 431. Order No. 672 explains that a
and provide those capabilities to its information regarding each transaction Reliability Standard must be designed to
transmission operators, transmission must be identified in an electronic label, achieve a specified reliability goal.188
service providers, and planning known as a ‘‘Tag,’’ which is used by an The goal of the INT group of Reliability
authorities. affected reliability coordinator, Standards is not simply to measure
transmission service provider or coordination as CenterPoint contends.
ii. Staff Preliminary Assessment Rather, these Reliability Standards are
balancing authority to assess the
423. The Staff Preliminary transaction for reliability impacts. In intended to ensure that uses of the Bulk-
Assessment did not identify any issues addition, communication, submission, Power System are known to operating
related to this Reliability Standard. assessment and approval of a Tag must entities and reliability coordinators
iii. Comments be completed for reliability sufficiently in advance to permit them
consideration before implementation of to evaluate reliability impacts and
424. ReliabilityFirst agrees with staff’s curtail transactions in the event system
evaluation that FAC–013–1 does not the transaction.
parameters approach their operating
contain any substantive issues. 428. In its April 4, 2006 Petition, limits.189 In our view, the INT group of
NERC submitted four Version 0 Reliability Standards is designed to
iv. Commission Proposal interchange Reliability Standards, INT– achieve a specified goal that is
425. The Commission’s concern about 001–0 through INT–004–0. In its August important to maintaining Bulk-Power
this Reliability Standard is related to the 28, 2006 Supplemental Filing, NERC System reliability. Accordingly, the
applicability. The Reliability Standard submitted nine Version 1 proposed Commission disagrees with CenterPoint
currently states that it is applicable to a Reliability Standards in the INT
reliability coordinator (as required by its 187 INT–001–1, INT–003–1, INT–004–1, INT–005–
186 NERC glossary at 8 defines ‘‘Transaction’’ as 1, INT–006–1, INT–007–1, INT–008–1, INT–009–1,

185 Path rating process in WECC and various ‘‘[a]n agreement to transfer energy from a seller to INT–010–1.
188 Order No. 672 at P 324.
regional transfer capability methodologies in the a buyer that crosses one or more Balancing
Eastern interconnection. Authority Area boundaries.’’ 189 NERC Petition at 40–41.
that the INT group of Reliability Allegheny, in contrast, comments that 440. With regard to Allegheny’s
Standards should be rejected. tagging deadlines within the Reliability comments, we believe that all
432. With regard to CenterPoint’s Standard provide an adequate measure Reliability Standards will benefit from
suggestion that ERCOT be explicitly of compliance. Measures and Levels of Non-
exempted from the INT group of Compliance. Further, as mentioned
Reliability Standards, we note that iv. Commission Proposal
above, the tagging deadlines which
NERC has not proposed such an 437. The Commission proposes to Allegheny believes provides an
exemption as a regional difference. approve INT–001–1 as mandatory and adequate measure of compliance have
Order No. 672 makes clear that a enforceable. In addition, we propose to been deleted and will be incorporated
proposed Reliability Standard, direct that NERC develop modifications by NAESB as business practices.
including a modification or regional to the Reliability Standard, as discussed
difference to a Reliability Standard, below. 441. While the Commission has
must be submitted by the ERO to the identified concerns with regard to INT–
438. Requirement R1.2 in INT–001–0
Commission for our consideration.190 001–1, it serves an important purpose in
(the Version 0 standard) requires data
Accordingly, we will not consider such ensuring that responsible entities have
submission on all point-to-point
an exemption unless submitted by the information they need to assess the
transfers entirely within a balancing
NERC for our review. reliability impact of an interchange
433. With regard to ReliabilityFirst’s authority area, including ‘‘all
grandfathered and ’non-Order 888’ transaction. While NERC should
comment, we agree that the provide Measures and Levels of Non-
development of missing compliance Point-to-Point Transmission Service.’’
This Requirement to submit data for Compliance, the Requirements set forth
elements is an important priority and in INT–001–1 are sufficiently clear and
note that NERC has stated that it plans grandfathered and non-Order 888 point-
to-point transmission service is not objective as to provide guidance for
to submit a filing in November 2006 that
included in INT–001–1 or any other compliance.
will include many such missing
compliance elements. NERC staffing of Version 1 Reliability Standard in the 442. Accordingly, giving due weight
the team assigned to develop missing INT group. These transactions, if not to the technical expertise of the ERO
compliance elements is a matter beyond reported, will create a gap in reliability and with the expectation that the
the scope of this proceeding. assessment and transaction curtailment Reliability Standard will accomplish the
provisions and may result in adverse purpose represented to the Commission
b. Interchange Information (INT–001–1) impact on reliable operation of the by the ERO and that it will improve the
i. NERC Proposal Interconnection. Therefore, the reliability of the nation’s Bulk-Power
Commission proposes to direct that System, the Commission proposes to
434. NERC states that the purpose of
NERC retain this important
INT–001–1 is to ensure that interchange approve Reliability Standard INT–001–
Requirement.
information is submitted to the 1 as mandatory and enforceable. In
reliability analysis service identified by 439. Requirements R1.1, R3, R4 and addition, pursuant to section 215(d)(5)
NERC.191 Proposed Reliability Standard R5 of INT–001–0, which relate to the of the FPA and § 39.5(f) of our
INT–001–1 applies to purchasing-selling timing and content of e-tags, have been regulations, we propose directing that
entities and balancing authorities. It deleted in the Version 1 Reliability
NERC submit a modification to INT–
specifies two Requirements that focus Standard. NERC indicates that these
001–1 that: (1) Includes Measures and
primarily on establishing who has Requirements are actually business
Levels of Non-Compliance; and (2)
responsibility in various situations for practices and that they will be included
in the next version of NAESB Business includes a Requirement that interchange
submitting the Interchange information,
Practices.193 Without prejudging any information must be submitted for all
previously known as transaction tag
future proceeding regarding NAESB point-to-point transfers entirely within a
data, to the reliability analysis service
identified by NERC.192 The business practices, we find acceptable balancing authority area, including all
Requirements apply to all dynamic NERC’s explanation that the deleted grandfathered and ‘‘non-Order No. 888’’
schedules, delivery from a jointly Requirements are business practices, transfers.
owned generator and bilateral and we propose to approve INT–001–1 c. Regional Difference to INT–001–1 and
inadvertent interchange payback. with the deletion of Requirements R1.1, INT–004–1: WECC Tagging Dynamic
R3, R4 and R5. However, the Schedules and Inadvertent Payback
ii. Staff Preliminary Assessment Commission notes that NAESB has not
435. Staff noted that INT–001–0 has at this time filed these e-tagging i. NERC Proposal
only one Measure and no Levels of Non- requirements as part of its business
Compliance. The Version 1 standard, practices. If, at the time of the final rule, 443. NERC states that WECC has a
INT–001–1, would delete the one no such business practice has been regional variance that exempts tagging
Measure and, thus, would contain no submitted, the Commission may dynamic schedules and inadvertent
Measures or Levels of Non-Compliance. reinstate these Requirements as part of payback. The waiver request included
the final rule. In the future, to ensure with the proposed Reliability Standards
iii. Comments explains that tagging requirements
that there is not a gap in Reliability
436. ISO/RTO Council generally Standards or business practices, the simply do not apply to operations in the
agrees with staff that INT–001–0 lacks Commission expects filings from NERC Western Interconnection. Also, a tagging
sufficient compliance measures. and NAESB be coordinated to allow for requirement for dynamic schedules
the seamless transfer of Requirements would create a burden for scheduling
190 OrderNo. 672 at P 249.

191 Currently,
from Reliability Standards to Business entities and not provide a substantial
the reliability analysis service used
by NERC is the Interchange Distribution Calculator.
Practices. benefit. NERC explains that control
192 NERC’s Glossary of Terms adopted by NERC’s areas and transmission providers have
Board of Trustees on August 2, 2006 defines 193 See NERC Implementation Plan for Coordinate
real-time scheduling information on
Interchange as ‘‘Energy transfers that cross Interchange Standards INT–005 through INT–010 dynamic schedules and that unilateral
Balancing Authority boundaries.’’ (December 15, 2005) at 2–3.
inadvertent payback is not allowed in ISO must provide equivalent to coordinate with the operator of the
the WECC.194 information to Reliability Authorities as HVDC tie.
would be extracted from a transaction 450. NERC indicates that it will
ii. Commission Proposal
tag.’’ modify this proposed Reliability
444. As discussed earlier, in Order Standard to address the lack of
No. 672, the Commission stressed that ii. Commission Proposal
Measures and Levels of Non-
uniformity of Reliability Standards 446. Order No. 672 explains that Compliance and resubmit the proposal
should be the goal and practice, ‘‘the ‘‘uniformity of Reliability Standards for Commission approval in November
rule rather than the exception.’’ 195 The should be the goal and the practice, the 2006.
absence of a tagging requirement for rule rather than the
dynamic schedules in WECC is, ii. Staff Preliminary Assessment
exception.’’ 198However, the
therefore, a matter of concern to us. Commission has stated that, as a general 451. Staff noted in its Staff
However, the Commission understands matter, regional differences are Preliminary Assessment that INT–003–0
that WECC currently is developing a permissible if they are either more contains no Measures or Levels of Non-
tagging requirement for dynamic stringent than the continent-wide Compliance. This comment applies
schedules.196 The Commission seeks Reliability Standard, or if they are equally to INT–003–1.
information from NERC on the status of necessitated by a physical difference in
the proposed tagging requirement, the iii. Commission Proposal
the Bulk-Power System.199 Regional
time frame for its development, its differences must still be just, reasonable, 452. The Commission notes that
consistency with INT–001–1 and INT– not unduly discriminatory or Requirement R1.1.3 addressing ramp
004–1, and whether the need for the preferential and in the public starting time and duration in INT–003–
current waiver will be obviated when interest.200 0 is removed from INT–003–1, and will
the tagging requirements become be included as a NAESB business
effective. The Commission will not 447. Based on the information
provided by NERC, the proposed practice, whereas Requirement R1.3
approve or remand the waiver until addressing interchange schedules
NERC submits this information. The regional difference for the INT
Reliability Standards is necessary to crossing an interconnection boundary is
Commission will consider any regional
accommodate MISO’s Commission- now included in the new INT–009–1. In
differences contained in proposed
approved, multi-control area energy addition, Requirements R2, R3 and R4
WECC tagging requirement for dynamic
market.201 Thus, we believe that the in INT–003–0 addressing
schedules when it is submitted by NERC
regional difference is appropriate as it is implementation requirements and
for Commission review.
more stringent than the continent-wide responsibilities on the balancing
d. Regional Difference to INT–001–1 Reliability Standard and otherwise authorities are transferred to INT–009–
and INT–003–1: MISO Energy Flow satisfies the statutory standard for 1. Requirement R5 stipulating that
Information approval of a Reliability Standard. balancing authorities in implementing
i. NERC Proposal 448. Accordingly, the Commission interchange schedule do not knowingly
proposes to approve the regional cause other system to violate operating
445. NERC states that a regional criteria is now retired. Requirement R6
difference is necessary to allow MISO to difference.
on the maximum limit on the net
provide market flow information in lieu e. Interchange Transaction interchange schedule is replaced with
of tagging intra-market flows among its Implementation (INT–003–1) R1.2 in the new INT–006–1.
member balancing authorities. The 453. As noted above, INT–003–1 lacks
i. NERC Proposal
waiver request included with the Measures and Levels of Non-
proposed Reliability Standards seeks 449. NERC states that the purpose of Compliance. While it is important to
specific provisions to accommodate a the INT–003–1 is to ensure that develop Measures and Levels of Non-
multi-control area energy market. balancing authorities confirm Compliance, the Commission believes
According to the waiver request, the interchange schedules with adjacent that INT–003–1 serves an important
MISO energy flow information waiver is balancing authorities prior to purpose in requiring receiving and
needed to realize the benefits of implementing the schedules in their sending balancing authorities to confirm
locational marginal pricing within area control error equations. The and agree on the interchange schedules.
MISO while increasing the level of proposed Reliability Standard applies to Further, we believe that the
granularity of information provided to balancing authorities. INT–003–1 Requirements set forth in INT–003–1 are
the NERC TLR Process. The waiver contains one Requirement that focuses sufficiently clear and objective to
request text states that it is understood on ensuring that a sending balancing provide appropriate guidance for
that the level of granularity of authority confirms interchange compliance.
information provided to reliability schedules with the receiving balancing 454. Accordingly, giving due weight
coordinators must not be reduced or authority prior to implementing the to the technical expertise of the ERO
reliability will be negatively schedules in its control area. The and with the expectation that the
impacted.197 The waiver text includes a proposed Reliability Standard also Reliability Standard will accomplish the
condition specifying that the ‘‘Midwest requires that, for the instances where a purpose represented to the Commission
high voltage direct current (HVDC) tie is by the ERO and that it will improve the
194 Waiver Request—Tagging Dynamic Schedules
on the scheduling path, both sending reliability of the nation’s Bulk-Power
and Inadvertent Payback, Approved November 21, and receiving balancing authorities have
2002. NERC Petition, Exhibit A. System, the Commission proposes to
195 Order No. 672 at P 290. approve Reliability Standard INT–003–

198 Order No. 672 at P 290.
196 Information on this development can be found
199 Id.
1 as mandatory and enforceable. In
at: http://www.wecc.biz/index.php?module=pn at 291.
Forum&func=viewtopic&topic=394. 200 Id.
197 Waiver Request—Energy Flow Information, 201 See Midwest Independent Transmission of the FPA and § 39.5(f) of our
Approved July 16, 2003. (Attached to NERC’s System Operator, Inc., 102 FERC ¶ 61,196 at P 38 regulations, we propose directing NERC
proposed Reliability Standards). (2003). to submit a modified Reliability
Standard that includes Measures and transactions within and between Filing, and no comments were
Levels of Non-Compliance. RTOs.205 submitted regarding it.
f. Regional Differences to INT–003–1: ii. Commission Proposal iv. Commission Proposal
MISO/SPP Scheduling Agent and MISO 457. The Commission ruled in Order 463. The Commission notes that
Enhanced Scheduling Agent No. 672 that, as a general matter, the Requirement R1 in INT–004–1
i. NERC Proposal following types of regional differences providing procedures to modify
in Reliability Standards would be interchange schedules to address
455. The MISO/SPP Scheduling Agent acceptable: (1) a regional difference that reliability events are replaced with
Waiver dated November 21, 2002 is more stringent than the continent- Requirements R1, R2 and R3 in the new
creates variances from this proposed wide Reliability Standard, including a INT–010–1. Requirement R2 which
Reliability Standard for MISO/SPP that regional difference that addresses applies to generator operators or load
permits a market participant to utilize a matters that the continent-wide serving entities for requesting to modify
scheduling agent to prepare a Reliability Standard does not; and (2) a an interchange transaction due to loss of
transaction Tag on its behalf.202 The regional Reliability Standard that is generation or load is replaced with
scheduling agent is a single point of necessitated by a physical difference in Requirements in INT–005–1 through
contact for all external, non- the Bulk-Power System.206 INT–010–1.
participating control areas or other 458. Based on the information 464. The Commission believes that
scheduling agents with respect to provided by NERC, the proposed Levels of Non-Compliance should be
scheduling interchange into, out of, or regional differences for the INT included.
through the RTO to which the variance Reliability Standard will provide 465. INT–004–1 contains a regional
administrative efficiency, and equal or variance from WECC that exempts
applies. The variance document
greater amounts of information to the tagging dynamic schedules and
explains that the variance is needed to
appropriate entities as required in inadvertent payback. This is discussed
implement a proposed RTO scheduling MISO’s Commission-approved multi-
process to meet the RTO obligations above in more detail. The Commission
control area energy market.207 Thus, we proposes to leave pending the WECC
under Order No. 2000, simplify believe that the proposed regional
transaction information requirements regional difference until NERC files a
differences meet the legal standard for new regional difference.
for market participants, reduce the approval as well as the first criteria
number of parties with which control 466. While the Commission has
discussed above for a regional
area operators must communicate, and identified concerns with regard to INT–
difference.
provide a common means to tag 004–1, this proposed Reliability
459. Accordingly, for the reasons set
transactions within and between RTOs. Standard serves an important purpose
forth above, the Commission proposes
It also specifies that the specific by setting thresholds on changes in
to approve these two additional regional
dynamic schedules for which modified
scheduling processes implemented differences.
interchange data must be submitted for
between participating control areas are
g. Dynamic Interchange Transaction reliability assessment. Further, the
internalized and transparent to the
Modifications (INT–004–1) Requirements set forth in INT–004–1 are
market, but that it has no reliability sufficiently clear and objective to
implications and will not violate any i. NERC Proposal
provide guidance for compliance.
reliability criteria.203 The Commission 460. NERC states that the purpose of 467. Accordingly, giving due weight
has issued orders authorizing use of INT–004–1 is to ensure that dynamic to the technical expertise of the ERO
these practices by MISO.204 transfers are adequately tagged to be and with the expectation that the
456. The MISO Enhanced Scheduling able to determine their reliability Reliability Standard will accomplish the
Agent Waiver dated July 16, 2003 impact. It requires the sink balancing purpose represented to the Commission
creates a variance from INT–003–1 for authority, i.e., the balancing authority by the ERO and that it will improve the
MISO that permits an enhanced single responsible for the area where the load reliability of the nation’s Bulk-Power
point of contact scheduling agent. or end-user is located, to communicate System, the Commission proposes to
Again, the variance document explains any change in the transaction. It also approve Reliability Standard INT–004–
that the variance is needed to requires the updating of a Tag for 1 as mandatory and enforceable. In
implement a proposed RTO scheduling dynamic schedules, i.e., transactions addition, pursuant to section 215(d)(5)
process to meet the RTO obligations that vary from within an hour. INT– of the FPA and § 39.5(f) of our
004–1 does not identify Levels of Non- regulations, we propose directing NERC
under Order No. 2000, simplify
Compliance. to submit a modification to INT–004–1
transaction information requirements
for market participants, reduce the ii. Staff Preliminary Assessment that includes Levels of Non-
number of parties with which control Compliance.
461. No concerns were raised in the
area operators must communicate, and Staff Preliminary Assessment. h. Interchange Authority Distributes
provide a common means to tag Arranged Interchange (INT–005–1)
iii. Comments
i. NERC Proposal
202 NERC has proposed three regional differences 462. INT–004–1 was included in
for INT–003–1 that would apply to MISO. One NERC’s August 28, 2006 Supplemental 468. INT–005–1, submitted with
regional difference was addressed above as it also
NERC’s August 28, 2006 Supplemental
related to Reliability Standard INT–001–1. The

remaining two are discussed here. 205 Waiver Request—Enhanced Scheduling Agent, Filing, ensures the implementation of
203 Waiver Request—Scheduling Agent, Approved November 16, 2003. ERC Petition, interchange between source and sink
Approved November 21, 2002. NERC Petition, Exhibit A. balancing authorities and the
Exhibit A. 206 Order No. 672 at P 291.
interchange information is distributed
204 Midwest Independent Transmission System 207 See Midwest Independent Transmission
Operator, Inc., et al., 108 FERC ¶ 61,163 at P 100 System Operator, Inc., 102 FERC ¶ 61,196 at P 38
by an interchange authority to the
(2004). (2003). relevant entities for reliability
assessments. INT–005–1 is applicable to balancing authorities and transmission iv. Commission Proposal
the ‘‘interchange authority.’’ 208 service providers and requires these 477. The Commission proposes to
entities to evaluate the energy profile approve INT–006–1 as mandatory and
ii. Commission Proposal
and the ramp rate of the generation to enforceable. In addition, we propose to
469. The Commission is satisfied that support the transactions in response to
the Requirements of the Reliability direct that NERC develop modifications
the request from the interchange to the Reliability Standard, as discussed
Standard are appropriate to ensure that authority to change the status of an
interchange information is distributed below.
interchange from an arranged 478. We agree with NERC and
and available for reliability assessment interchange to a confirmed interchange.
prior to its implementation. However, Southern that it would be duplicative
we are concerned regarding the ii. Staff Preliminary Assessment for a reliability coordinator or
applicability of INT–005–1 to the transmission owner to approve or deny
473. INT–006–1 is a new Reliability an individual schedule during tagging.
interchange authority. It is not clear Standard that mostly contains
from NERC’s definition whether an However, consistent with Southern’s
Requirements from retired INT–002–0. comment, we believe that reliability
interchange authority is a user, owner or Staff noted in its Staff Preliminary
operator of the Bulk-Power System, or coordinators and transmission operators
Assessment that INT–002–0 does not should review composite energy
what types of entities would be eligible explicitly apply to reliability
to perform such a function. Therefore, interchange transaction information
coordinators and transmission operators (composite Tags) for wide-area
the Commission requests that NERC for reliability assessments of
provide additional information reliability impact. When the review
transactions before they are indicated a potential detrimental
regarding the role of the interchange implemented. Staff indicated that it is
authority so that the Commission can reliability impact, the reliability
important that the Reliability Standard coordinator or transmission operator
determine whether it is a user, owner or apply to these entities explicitly because
operator of the Bulk-Power System that should communicate to the sink
power flows for interchange balancing authority the necessary
is required to comply with mandatory transactions cross multiple balancing
Reliability Standards. transaction modifications prior to
authority areas and affect multiple implementation. Accordingly, we
470. Reliability Standard INT–005–1
transmission paths in an propose to require the ERO to modify
does not include Levels of Non-
Interconnection. the proposed Reliability Standard to
Compliance.
471. Accordingly, giving due weight iii. Comments ensure that reliability coordinators and
to the technical expertise of the ERO transmission operators validate
and with the expectation that the 474. As discussed below, INT–006–1 composite Tags (now called composite
Reliability Standard will accomplish the raises a number of issues that are arranged interchanges) for reliability.
purpose represented to the Commission similarly raised by the Reliability 479. The Commission notes that INT–
by the ERO and that it will improve the Standard it replaces, INT–002–0. 006–1 has included Measures and
reliability of the nation’s Bulk-Power Therefore, relevant comments regarding Levels of Non-Compliance with
System, the Commission proposes to INT–002–0 are discussed here. Requirements on balancing authorities
approve Reliability Standard INT–005– 475. NERC maintains that staff’s and transmission service providers to
1 as mandatory and enforceable. In concerns regarding the applicability of check each arranged interchange for
addition, pursuant to section 215(d)(5) INT–002–0 to reliability coordinators reliability. We believe that INT–006–1
of the FPA and § 39.5(f) of our and transmission operators are serves an important purpose in
regulations, we propose to direct that addressed by proposed Reliability assessing each interchange transaction
NERC submit a modification to INT– Standard INT–004–0, which addresses from a reliability perspective.
005–1 that includes Levels of Non- reliability events such as potential or 480. Accordingly, giving due weight
Compliance. Further, the Commission actual SOL or IROL violations. to the technical expertise of the ERO
requests that NERC provide additional 476. Similarly, Southern submits that and with the expectation that the
information regarding the role of the the Reliability Standard currently Reliability Standard will accomplish the
interchange authority so that the applies to reliability coordinators and purpose represented to the Commission
Commission can determine whether it is transmission operators in their role in by the ERO and that it will improve the
a user, owner or operator of the Bulk- the reliability assessment of individual reliability of the nation’s Bulk-Power
Power System that is required to comply interchange transactions. Southern System, the Commission proposes to
with mandatory Reliability Standards. explains that an individual Tag is first approve Reliability Standard INT–006–
assessed by the balancing authority 1 as mandatory and enforceable. In
i. Response to Interchange Authority based on information on system limits addition, pursuant to section 215(d)(5)
(INT–006–1) provided by the reliability coordinator of the FPA and § 39.5(f) of our
i. NERC Proposal and/or the transmission operator. The regulations, we propose to direct that
472. INT–006–1, submitted with composite set of Tags and associated NERC submit a modification to INT–
NERC’s August 28, 2006 Supplemental schedules are then forwarded to the 006–1 that: (1) Makes it applicable to
Filing to replace INT–002–0, ensures reliability analysis services that reliability coordinators and
that each arranged interchange is reliability coordinators and transmission operators; and (2) requires
checked for reliability before it is transmission operators use for their reliability coordinators and
implemented. It is applicable to wide-area review. Southern contends transmission operators to review
that it would not be appropriate for composite transactions from the wide-
208 NERC’s glossary defines ‘‘interchange reliability coordinators and area reliability viewpoint and, where
authority’’ as ‘‘[t]he responsible entity that transmission owners to approve or deny their review indicates a potential
authorizes implementation of valid and balanced individual schedules during tagging, detrimental reliability impact,
Interchange Schedules between Balancing
Authority Areas, and ensures communication of
and states that they should be involved communicate to the sink balancing
Interchange information for reliability assessment in reviewing tags in a composite authorities necessary transaction
purposes.’’ manner. modifications prior to implementation.
j. Interchange Confirmation (INT–007–1) requests additional information because 490. The proposed Reliability
i. NERC Proposal it is not clear from NERC’s definition Standard, INT–010–1 has three
whether an interchange authority is a Requirements, which allows
481. INT–007–1, submitted with user, owner or operator of the Bulk- modifications to interchange schedules
NERC’s August 28, 2006 Supplemental Power System, or what types of entities under abnormal system conditions: (1)
Filing, ensures that each arranged would be eligible to perform such a The balancing authority that
interchange is checked for reliability function. experiences a loss of resources covered
before it is implemented. INT–007–1 486. However, the Commission is by an energy sharing agreement shall
requires the interchange authority to satisfied that the Requirements of the ensure that a request for an arranged
verify that the submitted arranged Reliability Standard are appropriate to interchange is submitted within
interchanges are valid and complete ensure that interchange information is required time; (2) for a modification to
with relevant information and approvals coordinated between the source and an existing interchange schedule that is
from the balancing authorities and sink balancing authorities prior to its directed by a reliability coordinator for
transmission service providers before implementation. Accordingly, the a current or imminent reliability-related
changing their status to confirmed Commission therefore proposes to reasons, the reliability coordinator
interchanges. approve INT–008–1 as mandatory and directs a balancing authority to submit
ii. Commission Proposal enforceable. We believe that the the modified arranged interchange
proposed Reliability Standard is just, reflecting that modification within a
482. We are concerned regarding the
reasonable, not unduly discriminatory specified time; and (3) for a new
applicability of INT–007–1 to the
interchange authority. As discussed or preferential, and in the public interchange schedule that is directed by
previously, it is not clear from NERC’s interest. a reliability coordinator for current or
definition whether an interchange l. Implementation of Interchange (INT– imminent reliability-related reasons, the
authority is a user, owner or operator of 009–1) reliability coordinator directs a
the Bulk-Power System, or what types of balancing authority to submit an
i. NERC Proposal arranged interchange reflecting that
entities would be eligible to perform
such a function, and in our discussion 487. INT–009–1, submitted with interchange schedule within required
of INT–005–1 we request that NERC NERC’s August 28, 2006 Supplemental time.
provide additional information Filing, ensures that the implementation ii. Staff Preliminary Assessment
regarding the role of the interchange of an interchange between source and
sink balancing authorities is 491. INT–010–1 includes three
authority.
483. However, the Commission is coordinated by an interchange Requirements that replace Requirement
satisfied that the Requirements of the authority. R1 from INT–004–0. Staff raised
Reliability Standard are appropriate to concerns in the Staff Preliminary
ii. Commission Proposal Assessment on INT–004–0 with respect
ensure that interchange information is
verified prior to its implementation. 488. The Commission is satisfied that to the use of transaction modifications
Accordingly, the Commission therefore the proposed Reliability Standard to address reliability events such as
proposes to approve INT–007–1 as performs a necessary reliability function actual IROL violations.
by coordination of interchanges and 492. Specifically, staff noted that
mandatory and enforceable. We believe
incorporating them into the ACE INT–004–0 (now INT–010–1) allows
that the proposed Reliability Standard is
calculation of the respective balancing modification of an interchange
just, reasonable, not unduly
authorities. Further, INT–009–1 transaction to address an actual SOL or
discriminatory or preferential, and in
includes clear and appropriate IROL violation.209 Staff stated that, in
the public interest.
Requirements, Measurements and light of the procedures involved,
k. Interchange Authority Distributes Levels of Non-Compliance to ensure including submission, assessment and
Status (INT–008–1) proper implementation of interchange approval, the total time necessary to
i. NERC Proposal transactions that have received implement an interchange transaction
reliability assessments. The Commission modification is expected to exceed
484. INT–008–1, submitted with significantly the 30 minute time-frame
NERC’s August 28, 2006 Supplemental therefore proposes to approve INT–009–
1 as mandatory and enforceable. We established in other Reliability
Filing, ensures that the implementation Standards, i.e., the requirement that the
of interchanges between source and sink believe that the proposed Reliability
Standard is just, reasonable, not unduly system be returned from a SOL/IROL
balancing authorities is coordinated by violation to a secure operating state as
an interchange authority. The Reliability discriminatory or preferential, and in
the public interest. soon as possible, but no more than 30
Standard applies to the interchange minutes after the violation.210 INT–004–
authority. INT–008–1 requires the m. Interchange Coordination 0 (now INT–010–1) does not contain a
interchange authority to distribute Exemptions (INT–010–1) clear reference to this potential
information to all balancing authorities,
i. NERC Proposal
transmission service providers and 209 NERC defines IROL as ‘‘[t]he value (such as
purchasing-selling entities involved in 489. INT–010–1, submitted with MW, MVar, Amperes, Frequency or Volts) derived
the arranged interchange when the NERC’s August 28, 2006 Supplemental from, or a subset of the System Operating Limits,
status of the transaction has changed Filing, allows certain types of which if exceeded, could expose a widespread area
interchange schedules to be initiated or of the Bulk Electric System to instability,
from arranged interchange to confirmed uncontrolled separation(s) or cascading outages.’’
interchange. modified by reliability entities under
NERC glossary at 8.
abnormal operating conditions, and to 210 Reliability Standard IRO–005–0, Requirement
ii. Commission Proposal be exempt from compliance with other R3, states in part ‘‘[i]f a potential or actual IROL
485. Again, we are concerned Reliability Standards in the INT group. violation cannot be avoided through proactive
intervention, the Reliability Coordinator shall
regarding the applicability of INT–008– The Reliability Standard is applicable to initiate control actions or emergency procedures to
1 to the interchange authority. As the balancing authority and reliability relieve the violation without delay, and no longer
explained above, the Commission coordinator. than 30 minutes.’’
limitation, and staff observed that it 7. IRO: Interconnection Reliability plans, coordination agreements and the
could lead to the inappropriate use of Operations and Coordination authority to act and direct reliability
transaction modification by reliability a. Overview entities to maintain reliable system
entities to deal with actual SOL/IROL operations under normal, contingency
violations. Staff expressed concern that 497. The Interconnection Reliability and emergency conditions. This
such actions could lead to the loss of Operations and Coordination (IRO) Reliability Standard would apply to
valuable time that would be needed to group of Reliability Standards detail the reliability coordinators and regional
readjust the system effectively using responsibilities and authorities of a reliability organizations.
other operational corrective actions. reliability coordinator.212 The proposed
IRO Reliability Standards establish ii. Staff Preliminary Assessment
iii. Comments requirements for data, tools and wide 501. The Staff Preliminary
493. There were no comments area view, all of which are intended to Assessment noted that IRO–001–0 does
submitted regarding the use of facilitate a reliability coordinator’s not explicitly assign responsibilities to
transaction modification to address ability to perform its responsibilities reliability coordinators in its Purpose or
actual IROL violations in INT–010–1. and ensure the reliable operation of the Requirements. Responsibilities can only
iv. Commission Proposal interconnected grid. be inferred from the definition of
reliability coordinator in the NERC
494. The Commission believes that it b. General Comments
glossary.
is generally ineffective to use 498. CenterPoint believes that the IRO
transaction modifications to mitigate an series of Reliability Standards are iii. Comments
actual IROL violation or other system largely unnecessary as they are process- 502. NERC comments that virtually
condition that calls for expeditious oriented. It proposes the consolidation every Requirement in IRO–001–0
return to a secure system state. of the IRO series of Reliability Standards applies to reliability coordinators, so it
Transaction modifications are even less to replace the process based does not understand the Staff
effective than the use of transmission Requirements with performance Preliminary Assessment’s concern
load relief (TLR) procedures to mitigate metrics. If, after some time, these do not regarding the assignment of a reliability
an actual IROL violation. We note that achieve their reliability goal, they coordinator’s responsibilities. It also
the Blackout Report specified that NERC should be rejected. states that the compliance registry will
should ‘‘clarify that the [TLR] process 499. The Commission believes that include reliability coordinators.
should not be used in situations performance metrics will generally 503. MRO and ReliabilityFirst agree
involving an actual violation of an complement and improve the proposed with the Staff Preliminary Assessment.
Operating Security Limit.’’ The Blackout Reliability Standards. However, we do MRO believes that a clarification of the
Report stated that ‘‘the TLR procedure is not believe that a Reliability Standard ‘‘Purpose’’ section of IRO–001–0 is
often too slow for use in situations in based solely on performance metrics can warranted to better identify a reliability
which an affected system is already in replace the proposed IRO Reliability coordinator’s responsibilities.
violation of an Operating Security Standards. This is because performance 504. The ISO/RTO Council does not
Limit.’’ 211 We believe these same metrics, in general, are lagging share the Staff Preliminary Assessment’s
concerns articulated in the Blackout indicators, and therefore, could only concern because each reliability
Report apply all the more so to a serve as reactive tools in improving the coordinator’s ‘‘reliability plan’’ is
transaction modification to address an Reliability Standards. Additionally, we approved by the NERC Operating
actual IROL violation. do not agree with CenterPoint’s Committee. It states that this process is
495. Reliability Standard INT–010–1 statement that the IRO series of intended to ensure that a reliability
includes provisions that allow Reliability Standards are largely coordinator’s peers validate that there is
modification to an existing interchange unnecessary and can be replaced with an appropriate entity authorized to carry
schedule or submission of a new performance standards. On the contrary, out a reliability coordinator’s plans.
interchange schedule that is directed by we believe that the proposed IRO series iv. Commission Proposal
a reliability coordinator to address of Reliability Standards establish
current or imminent reliability-related requirements for data, tools, and wide 505. The stated Purpose of IRO–001–
reasons. We interpret that these current area view and other real-time operating 0 is ‘‘[r]eliability [c]oordinators must
or imminent reliability-related reasons activities that must be performed by a have the authority, plans and
do not include actual IROL violations as reliability coordinator to ensure the agreements in place to immediately
they require immediate control actions reliable operation of the interconnected direct reliability entities within their
so that the system can be returned to a grid. Reliability Coordinator Areas to re-
secure operating state as soon as dispatch generation, reconfigure
possible and no longer than 30 c. Reliability Coordination— transmission, or reduce load to mitigate
minutes—a period that is much shorter Responsibilities and Authorities (IRO– critical conditions to return the system
than the time that is expected to require 001–0) to a reliable state.’’ As noted by NERC,
for new or modified transactions to be i. NERC Proposal IRO–001–0 includes eight Requirements
implemented. that set forth reliability coordinator
496. Accordingly, with the above 500. IRO–001–0 requires that a responsibilities. However, these
interpretation, the Commission reliability coordinator have reliability Requirements do not comprehensively
therefore proposes to approve INT–010– 212 According to the NERC glossary, at 13, a
match the responsibilities described in
1 as mandatory and enforceable. We the Purpose statement of this Reliability
reliability coordinator is ‘‘the entity with the

believe that the proposed Reliability highest level of authority who is responsible for the Standard. Nonetheless, the Commission
Standard is just, reasonable, not unduly reliable operation of the Bulk Electric System, has observes that the IRO group of
discriminatory or preferential, and in the Wide Area view of the Bulk Electric System, Reliability Standards, taken as a whole,
and has the operating tools, processes and
the public interest. procedures, including the authority to prevent or
together with the NERC glossary
mitigate emergency operating situations in both definition of reliability coordinator,
211 Blackout Report at 163. next-day analysis and real-time operations * * *’’ provides an adequate understanding of
the role and responsibilities of a ii. Staff Preliminary Assessment of the FPA and § 39.5(f) of our
reliability coordinator. Thus, while 509. The Staff Preliminary regulations, the Commission proposes to
IRO–001–0 could be improved by Assessment did not identify any direct that NERC submit, a modification
comprehensively defining the overall substantive issues other than noting the to IRO–002–0 that: (1) Includes
responsibility of a reliability absence of Measures and Levels of Non- Measures and Levels of Non-
coordinator, as suggested in the title of Compliance. Compliance and (2) modifies
the Reliability Standard (Reliability Requirement R7 to explicitly require a
Coordination—Responsibilities and iii. Comments minimum set of tools for the reliability
Authorities), we will not propose to 510. MISO contends that the proposed coordinator.
direct NERC to do so. Reliability Standard does not clearly e. Reliability Coordination—Wide Area
506. Requirement R1 of IRO–001–0 require all reliability coordinators to View (IRO–003–1)
provides that each regional reliability demonstrate a functioning state
organization, ‘‘subregion’’ or estimation, real-time contingency i. NERC Proposal
‘‘interregional coordinating group’’ shall analysis or a defined ‘‘wide area view’’ 513. The stated purpose of the
establish one or more reliability that includes visibility into neighboring proposed Reliability Standard is that a
coordinators to continuously assess regions. According to MISO, the reliability coordinator must have a wide
transmission reliability and coordinate requirement that a reliability area view of its own and adjacent areas
emergency operations. Sections 502 and coordinator have ‘‘adequate analysis to maintain situational awareness. Wide
503 of NERC’s Rules of Procedure tools’’ is a ‘‘loophole that belies the term area view also facilitates a reliability
indicate that the ERO and Regional ‘standard.’ ’’213 ReliabilityFirst asserts coordinator’s ability to calculate SOL
Entities are responsible for registering, that NERC should expedite the and IROL as well as determine potential
certifying and verifying entities development of missing compliance violations in its own area. NERC
pursuant to NERC’s compliance registry, elements within IRO–002–0. indicates that it plans to modify IRO–
including reliability coordinators. The 003–1 to address the absence of
Commission proposes that NERC Measures and Levels of Non-
modify Requirement R1 to reflect the 511. Requirement R7 currently does Compliance and will resubmit it for
process set forth in the NERC Rules of not specifically require the reliability Commission approval in November
Procedures, including the substitution coordinators to have specific tools 2006.
of Regional Entity for regional reliability because it includes the phrase ‘‘such
as.’’ Requirement R7 should be modified ii. Staff Preliminary Assessment
organization.
507. Accordingly, giving due weight to explicitly require a minimum set of 514. The Staff Preliminary
to the technical expertise of the ERO tools that should be made available to Assessment indicated that IRO–003–1
and with the expectation that the the reliability coordinator. We share does not specify the criteria for defining
Reliability Standard will accomplish the ReliabilityFirst’s concern that IRO–002– critical facilities in adjacent systems
purpose represented to the Commission 0 lacks Measures and Levels of Non- whose status and loading could affect
by the ERO and that it will improve the Compliance and direct NERC to add the reliability of neighboring systems.
reliability of the nation’s Bulk-Power these compliance elements in its
modification of the proposed Reliability iii. Comments
System, the Commission proposes to
approve Reliability Standard IRO–001– Standard. While the Commission has 515. NERC responds that IRO–003–1
0 as mandatory and enforceable. In identified concerns with regard to IRO– provides that ‘‘critical facilities’’ are
addition, pursuant to section 215(d)(5) 002–0, we believe that the proposal those that, if they fail, would result in
serves an important purpose in ensuring an SOL or IROL violation. According to
that reliability coordinators have the NERC, this means that critical facilities
regulations, the Commission proposes to
information, tools and capabilities to can only be determined by contingency
direct that NERC submit a modification
perform their functions. NERC should analysis and change through time, and
to Requirement R1 of IRO–001–0 that:
provide Measures and Levels of Non- therefore, ‘‘may or may not exist.’’
(1) Reflects the process set forth in the
Compliance for this proposed Reliability Because an SOL or IRO violation is an
NERC Rules of Procedures; and (2)
Standard. Nonetheless, the proposed operating state that can only be
eliminates the regional reliability
Requirements set forth in this Reliability determined by running a series of ‘‘what
organization as an applicable entity.
Standard are sufficiently clear and if’’ analyses, IRO–003–1 defines a
d. Reliability Coordination—Facilities objective to provide guidance for ‘‘critical facility’’ as the facility that, if
(IRO–002–0) compliance. it fails, places the transmission system
512. Accordingly, giving due weight in a state ‘‘such that the failure of some
i. NERC Proposal
to the technical expertise of the ERO other element will result in facility
508. The proposed Reliability and with the expectation that the overloads, instability, or uncontrolled
Standard, IRO–002–0, establishes the Reliability Standard will accomplish the cascading outages.’’ 214 NERC states that
requirements for data, information, purpose represented to the Commission the Commission should approve the
monitoring and analytical tools and by the ERO and that it will improve the Reliability Standard and adds that it
communication facilities to enable a reliability of the nation’s Bulk-Power will consider revising it to clarify the
reliability coordinator to meet the System, the Commission proposes to definition of ‘‘critical facility.’’
reliability needs of the Interconnection, approve Reliability Standard IRO–002– 516. MRO agrees with the Staff
act in addressing real-time emergency 0 as mandatory and enforceable. In Preliminary Assessment that this
conditions and control analysis tools. addition, pursuant to section 215(d)(5) Reliability Standard should be revised
NERC indicates that it plans to modify to specify the criteria for defining
IRO–002–0 to address the lack of 213 MISO Comments at 13, n.13, quoting IRO– ‘‘critical facilities’’ in adjacent systems.
Measures and Levels of Non- 002–0, Requirement R7, which states, ‘‘[e]ach MISO contends that the proposed
Reliability Coordinator shall have adequate analysis
Compliance and resubmit it for tools such as state estimation, pre- and post-
Reliability Standard does not clearly
Commission approval in November contingency analysis capabilities (thermal, stability,
2006. and voltage), and wide-area overview displays.’’ 214 NERC Comments at 126.
define the term ‘‘wide area view’’ that Commission proposes to direct NERC to operations planning studies and does
includes visibility into neighboring provide Measures and Compliance not require modification.219 Similarly,
regions. elements for the proposed Reliability ISO–RTO Council comments that the
Standard, and include criteria to define proposed Reliability Standard contains
‘‘critical facilities’’ in a reliability the appropriate requirements for
517. The Blackout Report emphasized coordinator’s area and its adjacent ensuring reliable operations because
that a principal cause of the August systems. Nonetheless, the Requirements there are other tools available to meet
2003 blackout was a lack of situational set forth in IRO–003–1 are sufficiently the needs identified with a next-day
awareness, which was in turn the result clear and objective to provide guidance analysis. These alternative tools are
of inadequate reliability tools and for compliance and a basis for adequate for conducting next-day
backup capabilities.215 It pointed out enforcement. analysis.
that the need for improved visualization 520. Accordingly, giving due weight 524. MRO suggests that the next-day
capabilities over a wide geographic area to the technical expertise of the ERO reliability analyses do not need to
has been a recurrent theme in blackout and with the expectation that the include the control actions that would
investigations. The Blackout Report also Reliability Standard will accomplish the be implemented to bring the system
explained that the Task Force purpose represented to the Commission back to a stable state. MRO argues that,
investigation of the August 2003 by the ERO and that it will improve the in most cases, the actual dispatch and
blackout revealed that ‘‘there has been reliability of the nation’s Bulk-Power condition of the system during real-time
no consistent means across the Eastern System, the Commission proposes to is not representative of the dispatch
Interconnection to provide an approve Reliability Standard IRO–003– used in the model for performing the
understanding of the status of the power 1 as mandatory and enforceable. In next-day analyses and, thus, mitigation
grid outside of a control area,’’ and addition, pursuant to section 215(d)(5) action needed during real-time will
improved visibility of grid status would of the FPA and § 39.5(f) of our differ.
aid an operator in making adjustments regulations, the Commission proposes to 525. ReliabilityFirst agrees in general
in operations to mitigate potential direct that NERC submit a modification with the Staff Preliminary Assessment’s
problems.216 The Commission believes to IRO–003–1 that includes: (1) comments, but cautions that the
that this issue is applicable to the entire Measures and Levels of Non- proposal to identify and study all
country and not just the Eastern Compliance; and (2) criteria to define possibilities for alleviating SOL and
Interconnection. IRO–003–1 addresses the term ‘‘critical facilities’’ in a IROL may be impractical and
these important concerns of the reliability coordinator’s area and its unachievable.
Blackout Report by requiring that a adjacent systems.
reliability coordinator monitor its own iv. Commission Proposal
f. Reliability Coordination—Operations
and adjacent areas to have a wide area 526. The Commission agrees with
Planning (IRO–004–1)
view that is ‘‘necessary to ensure that, NERC that the proposed Reliability
at any time, regardless of prior planned i. NERC Proposal Standard requires next day operations
or unplanned events, the Reliability 521. The stated purpose of IRO–004– planning. While the Staff Preliminary
Coordinator is able to determine any 1 is to require that each reliability Assessment mentions the next-day
potential System Operating Limit and coordinator conduct next-day planning analysis and the need to study
Interconnection Reliability Operating operations reliability analyses to ensure events that would result in cascading for
Limit violations within its Reliability that the system can be operated reliably the first contingency, this was not the
Coordination Area.’’ 217 in anticipated normal and contingency intended focus of staff’s observations.
518. The Commission notes that system conditions. Operations plans Rather, the thrust of staff’s concern was
Requirement R2 of the Reliability must be developed to return the system that the control actions necessary to
Standard requires that each reliability to a secure operating state after return the system to a stable state after
coordinator know the current status of contingencies and shared with other the first contingency must do so
all ‘‘critical facilities’’ whose ‘‘failure, operating entities. effectively within the specified
degradation or disconnection’’ could implementation time of less than 30
result in an SOL or IROL violation. ii. Staff Preliminary Assessment
minutes.220 To assure that an operator
However, IRO–003–1 does not specify 522. The Staff Preliminary has either sufficient generation
the criteria for defining critical facilities. Assessment noted that, while IRO–004– resources, transmission modifications,
NERC explains that specifying such 1 requires Reliability Coordinators to or load shedding capability to avoid a
criteria is very difficult because critical conduct next-day reliability analyses to cascading outage after the first
facilities can only be determined by ensure reliable operations in anticipated contingency, the control actions should
contingency analysis and change normal and contingency event
be identified in the next-day analyses to
through time. While NERC conditions, it ‘‘does not require that the
better prepare system operators to deal
acknowledges the absence of such system be assessed in the next-day
criteria, it requests that the Reliability planning analysis to identify the control 219 Requirement R1 requires that ‘‘Each Reliability
Standard be approved. In addition, actions needed to bring the system back Coordinator shall conduct next-day reliability
NERC indicates that it will consider a to a stable state, with an effective analyses for its reliability coordinator area to ensure
modification to clarify the definition of implementation time of within 30 that the Bulk Electric System can be operated
reliably in anticipated normal and contingency
‘‘critical facility.’’ minutes, so that the system will be able event conditions. The reliability coordinator shall
519. IRO–003–1 serves an important to withstand the next contingency conduct contingency analysis studies to identify
reliability goal of requiring reliability without cascading.’’ 218
potential interface and other SOL and IROL

coordinators to have a wide area view violations, including overloaded transmission lines
iii. Comments and transformers, voltage and stability limits, etc.’’
and maintain situational awareness. The 220 IRO–005–1, Requirement R3 states, in relevant
523. NERC asserts that Requirement
part, ‘‘* * * the [r]eliability [c]oordinator shall
215 Blackout Report at 159. R1 of IRO–004–1 does require next-day initiate control actions or emergency procedures to
216 Id.
relieve the violations without delay, and no longer
217 IRO–003–1, Requirement R1. 218 Staff Preliminary Assessment at 71. than 30 minutes.’’
with system contingencies or reliability coordinators must perform within its own safe limit.221 NERC states
emergencies in real-time operations. throughout the day. The stated that the point of these limits is not
527. The Commission believes that purposed of the proposed Reliability whether a particular transmission
identification of potential control Standard is that a reliability coordinator facility is operating within its normal
actions will aid system operators in must be continuously aware of limits, but to determine what happens if
performance of their duties. While MRO conditions within its area and include the transmission element fails regardless
is correct that control actions identified this information in its reliability of how much power is flowing through
in a next-day analysis may not always assessments. Additionally, a reliability it.
be useful in a real-time scenario, coordinator must monitor the 534. NERC states that it will consider
nonetheless, the control actions parameters of the system that may have clarifying those Reliability Standards
identified in the next-day analysis may a significant impact upon its area and that indicate a contingency is not
quite often be relevant and having the neighboring reliability coordinator required and, as a corollary, that a
system operators aware of options areas. NERC indicates that it plans to Reliability Standard should not allow a
earlier on would be helpful. modify IRO–005–0 to address the lack of system operator to ‘‘drift’’ in and out of
528. The Commission agrees with Measures and Levels of Non- an SOL or IROL violation. Further,
NERC regarding the applicability of this Compliance and resubmit it for NERC will continue to refine its
Reliability Standard. While most Commission approval in November definition of SOL and IROL violations.
Requirements pertain to reliability 2006. The Operating Committee has
coordinators, they also require each commissioned an Operating Limits
balancing authority, transmission i. Staff Preliminary Assessment Definition Task Force to work on this
operator, transmission owner, generator 532. Requirement R3 of IRO–005–1 matter, and the Task Force will bring its
operator, and load-serving entity to provides that: ‘‘[i]f a potential or actual final suggestions to the Operating
provide information to its reliability IROL violation cannot be avoided Committee by the end of 2006. NERC
coordinator for system studies. It also through proactive intervention, the indicates that it will review proposed
requires that each transmission Reliability Coordinator shall initiate Reliability Standards IRO–003–0 and
operator, balancing authority and control actions or emergency procedures IRO–005–1 and address SOL and IROL
transmission service provider to comply to relieve the violation without delay, violation mitigation.
with the directive of its reliability and no longer than 30 minutes. The 535. According to NERC, the 30-
coordinator based on next-day Reliability Coordinator shall ensure all minute limit for mitigating IROL
assessments. resources, including load shedding, are violations is one of many reliability
529. While the Commission has available to address a potential or actual standards gleaned from decades of
identified one concern with regard to IROL violation.’’ The Staff Preliminary interconnected systems operation
IRO–004–1, the proposed Reliability Assessment pointed out that this experience, and represents a tradeoff
Standard serves an important purpose Requirement may be interpreted in between: (1) sufficient time to allow the
by requiring that each reliability either of two ways: (1) a less transmission operator or reliability
coordinator conduct next-day conservative interpretation in which an coordinator to mitigate the violation
operations reliability analyses to ensure IROL is allowed to be exceeded during without having to shed load or
that the system can be operated reliably normal operations, i.e., prior to a disconnect transmission system
in anticipated normal and contingency contingency, provided that corrective components; and (2) the risk that some
system conditions. Further, the actions are taken within 30 minutes; event will occur before the mitigating
Requirements set forth in IRO–004–1 are and (2) a more conservative action is taken. NERC explains that
sufficiently clear and objective to interpretation that an IROL should only action is required ‘‘as soon as possible’’
provide guidance for compliance and a be exceeded after a contingency and the or ‘‘without delay,’’ however, exceeding
basis for enforcement. system must subsequently be returned an SOL or IROL for no more than 30
530. Accordingly, giving due weight to a secure condition as soon as minutes is not a violation. It contends
to the technical expertise of the ERO possible, but no longer than 30 minutes. that this approach is reasonable because
and with the expectation that the Therefore, IRO–005–1 creates the it allows the system operator to decide
Reliability Standard will accomplish the situation in which the system may be on what course of action to take.
purpose represented to the Commission one contingency away from potential Operating options that are less severe
by the ERO and that it will improve the cascading failure if operated under the than shedding load are often available,
reliability of the nation’s Bulk-Power less conservative interpretation or two but it explains that these actions may
System, the Commission proposes to contingencies away from potential require more time for implementation.
approve Reliability Standard IRO–004– cascading failure if the more NERC asserts that its committees and
1 as mandatory and enforceable. In conservative interpretation is adopted. subcommittees have debated the phrase,
addition, pursuant to section 215(d)(5) ‘‘as soon as possible’’ for years and have
ii. Comments
of the FPA and § 39.5(f) of our not found a better way to articulate a
regulations, the Commission proposes to 533. NERC acknowledges that the requirement that allows the system
direct that NERC submit a modification SOLs and IROLs are among the most operator the leeway to decide the best
to IRO–004–1 that requires the next-day important operating measures contained course of action.
analysis to identify effective control in the proposed Reliability Standards 536. MRO and NYSRC agree with the
actions that can be implemented within and that it continues to refine the Staff Preliminary Assessment that IRO–
30 minutes during contingency definitions of both these terms. NERC 005–1 allows varying interpretations
conditions. explains that SOL and IROL violations with respect to IROL limits under
do not necessarily result from an event normal and contingency conditions and
g. Reliability Coordination—Current or ‘‘contingency.’’ It asserts that the should be revised to clarify how IROL
Day Operations (IRO–005–1) transmission system may ‘‘drift’’ into an events are addressed. ReliabilityFirst
531. IRO–005–1 ensures energy SOL or IROL violation without any believes that a methodology to address
balance and transmission reliability for triggering event and with every element
the current day by identifying tasks that of the transmission system operation 221 See NERC Comments at 43–48.
SOLs and IROLs must be developed. It the reliability goal stated in the system operator to ‘‘drift’’ in and out of
argues that this will aid in clarifying definition of Reliable Operation, the an SOL or IROL violation.
that exceeding limits is not acceptable Bulk-Power System must be operated to 544. The Commission agrees with
operating practice. According to respect all applicable IROLs during ReliabilityFirst’s comments that
ReliabilityFirst, proposed Reliability normal conditions, i.e. prior to a exceeding any limit is not acceptable
Standards are being developed that will contingency, so that the system is operating practice. The system should
provide more definition and detail in capable of withstanding a critical strive to operate in a secure state that
this area. It urges the acceleration of this contingency without resulting in respects all IROLs under normal
development. instability, uncontrolled separation or conditions at all times, except for
537. MidAmerican believes that staff’s cascading outages. infrequent and unanticipated changing
‘‘more conservative’’ interpretation may 540. IRO–005–1 allows a system conditions that are beyond the control
be overly conservative and should not operation to respect IROLs in two of reliability coordinators and operating
be adopted. It contends that, in an possible ways: (1) allowing IROL to be entities under their jurisdiction.
interconnected transmission network, it exceeded during normal operations, i.e., Furthermore, these unanticipated
is difficult to operate prior to a prior to a contingency, provided that factors should be limited and should not
contingency so that potential IROL corrective actions are taken within 30 include load pick-up and drop-off as
violations are avoided at all times. It minutes or (2) exceeding IROL only after changes in load demand or coordinated
believes that to adopt the more a contingency and subsequently generation dispatches and transactions,
conservative interpretation could returning the system to a secure all of which would have obtained prior
require an operator to scale back the condition as soon as possible, but no assessments and approvals.
operation of its system pre-contingency longer than 30 minutes. Thus, the 545. In contrast to MidAmerican’s
by an inordinate amount to provide a system can be one contingency away comments, the Commission does not
safety margin so as not to risk a from potential cascading failure if believe that respecting IROL under
potential IROL violation even for only operated under the first interpretation normal system conditions requires an
very short periods of time. and two contingencies away from inordinate amount of operating margin
MidAmerican maintains that such an cascading failure under the second which may result in an unjustifiably
operation would result in slightly more high price. However, we propose to
interpretation.
reliable operation at an unjustifiably direct NERC to perform a survey of
541. The Commission notes that the
high price. present operating practices and actual
proposed Reliability Standards (e.g.
operating experience concerning
iii. Commission Proposal TOP–007–0) do not consider operation
drifting in and out of IROL violations.
538. The Commission proposes to exceeding IROL for less than 30 minutes As part of the survey, we will require all
approve IRO–005–1 as mandatory and as a compliance violation. This, in reliability coordinators to report any
enforceable. In addition, we propose to addition to the less conservative violations of IROLs, their causes, the
direct that NERC develop modifications interpretation that IROL violation is date and time of the violation, and the
to the Reliability Standard and perform permissible during normal operations, duration in which actual operations
a survey of present operating practices opens up a significant reliability gap exceeded IROL to the ERO on a monthly
and actual operating experience that allows operations with IROL basis for one year beginning two months
concerning drifting in and out of IROL violations for less than 30 minutes at a after the effective date of the final rule.
violations. time. Under the mandatory reliability 546. The Commission also finds that
539. The Commission believes that construct, there would be no well-designed Levels of Non-
one of the fundamental principles in enforcement provision to sanction Compliance should duly recognize the
operating the Bulk-Power System against such actions even they resulted magnitude, frequency and duration of
reliably is that the system must be in cascading outages. IROL violations under normal system
capable of supplying firm demand and 542. The Commission believes a conditions and differentiate those
supporting firm transactions while proactive standard, that clearly defines caused by system contingencies. The
retaining the capability to withstand a that reliable operations means operating former, if not severe, frequent, of
critical contingency without resulting in the system within IROLs and requires extended duration or willfully
instability, uncontrolled separation or such operating practice be reinforced by deployed, should not incur heavy
cascading failures. This is affirmed by periodic reporting of the frequency, penalties. Nevertheless, these
the term, Reliable Operation, as set forth duration and causes of IROL violations, occurrences and causes should be
in section 215(a)(4) of the FPA 222 and is needed to prevent or mitigate the risk recorded and reported. We understand
the technical requirement as stated in of blackouts. This is because, by that most reliability coordinators and
Table 1 of Reliability Standard TPL– definition, when the system is operating transmission operators already keep
002–0.223 Therefore, in order to achieve in violation of IROLs and if a critical records of power flows on transmission
contingency occurs, cascading outages interfaces, transmission paths or
222 Reliable operation: Operating the elements of
will result. flowgates versus their respective IROLs
the Bulk-Power System within equipment and 543. Operating the system during as a part of their operating and
electric system thermal, voltage and stability limits
so that instability, uncontrolled separation, or normal system conditions with IROL management tools. We believe that the
cascading failures of such system will not occur as violations is also known in the industry practice of separately recording and
a result of sudden disturbance, including a as ‘‘drifting in and out’’ of an IROL reporting IROL violations and durations
Cybersecurity Incident, or unanticipated failure of violation. This is the first and less occurring under normal and
system elements.
conservative interpretation of the contingency system conditions serves
223 TPL–002–0 System Performance Following
Loss of a Single Bulk Electric System Element, proposed Reliability Standard as stated several purposes, including: (1)
Table 1: For Category B events resulting in loss of above and one contingency away from Reinforcing the sound principles of
a single element, the system remains stable and cascading failure. We particularly note reliable system operations; (2) serving as
both thermal and voltage limits are within
applicable ratings with no loss of demand or
that the NERC Operating Committee a performance metric to gauge the
curtailment of firm transfers and no cascading recommended that the proposed effectiveness of Reliability Standards,
outages. Reliability Standards should not allow a coordinated Interconnection operations,
and the health of the Bulk-Power transactions based on their priorities impacts of bilateral transactions causing
System; and (3) proactively improving and according to different levels of TLR parallel flows. The procedure curtails
system reliability over time. procedures.224 The proposed Reliability bilateral transactions, which causes
547. It is important to keep in mind Standard includes a regional difference generation to be re-dispatched, which in
that, while the Commission has for reporting market flow information to turn changes the flow patterns on the
concerns regarding Requirement R3, the the Interchange Distribution Calculator transmission system. The curtailments
proposed Reliability Standard contains rather than tagged transaction are based on a power flow model of the
17 Requirements relating to current day information for the MISO and PJM Eastern Interconnection, and have the
operations. With this perspective, while areas.225 It also references the effect of reducing the loading on those
the Commission has identified a number equivalent Interconnection-wide lines over which the transactions are
of concerns with regard to IRO–005–1, congestion management methods used actually flowing.
we believe that the proposed Reliability in the WECC and ERCOT regions. 553. NERC agrees that the TLR
Standard adequately addresses the 550. On August 28, NERC submitted procedure alone is usually not effective
important reliability goal of requiring a IRO–006–3 for approval, which replaces as a control measure to mitigate an IROL
reliability coordinator to be IRO–006–1. The new proposal would violation and explains that the TLR
continuously aware of conditions extend the PJM/MISO regional procedure was not intended to be
within its reliability coordinator area difference to SPP and contains some effective in this manner.229 It states that,
and include this information in its additional changes to the Attachment to while TLR procedures can be effective
reliability assessments. Further, NERC the Reliability Standard. The comments as a preventive tool to adjust and
should provide Measures and Levels of submitted in response to the manage bilateral transactions so that
Non-Compliance elements for this Preliminary Staff Assessment on IRO– limit violations do not occur, other
proposed Reliability Standard. 006–1 apply equally to IRO–006–3.226 options such as local or market area re-
Nonetheless, the proposed ii. Staff Preliminary Assessment dispatch and transmission
Requirements set forth in this Reliability reconfiguration are more precise for a
Standard are sufficiently clear and 551. The Staff Preliminary
system operator to stay within SOLs and
objective to provide guidance for Assessment noted that IRO–006–1 does
IROLs.
not address concerns expressed in the
compliance. 554. NERC believes that transmission
548. Accordingly, giving due weight Blackout Report that call for
operators and reliability coordinators
to the technical expertise of the ERO ‘‘clarify[ing] that the transmission
understand that the TLR procedure is
loading relief (TLR) process should not
and with the expectation that the not the only method for mitigating an
be used in situations involving an actual
Reliability Standard will accomplish the SOL or IROL violation and that the
violation of an Operating Security Limit
purpose represented to the Commission proposed Reliability Standard—as one
[SOL].’’ 227 It also noted that
by the ERO and that it will improve the tool among many—is adequate and
Requirement R2, which provides that a
reliability of the nation’s Bulk-Power necessary to protect Bulk-Power System
reliability coordinator experiencing a
System, the Commission proposes to reliability. NERC states that ‘‘it does not
potential or actual SOL or IROL
approve Reliability Standard IRO–005– believe the recommendation of the
violation shall select from either a local
1 as mandatory and enforceable. In Blackout Report that ‘‘the [TLR] process
or Interconnection-wide transmission
addition, pursuant to section 215(d)(5) should not be used in situations
loading relief procedure, could lead a
of the FPA and § 39.5(f) of our reliability system operator to involving an actual violation of an
regulations, the Commission proposes to ‘‘inappropriately use transmission Operating Security Limit [SOL]’’ needs
direct that NERC submit a modification loading relief procedures to mitigate further discussion to determine possible
to IRO–005–1 that includes Measures actual IROL violations’’ and, ‘‘in doing changes to standard.’’ 230
and Levels of Non-Compliance. We so, valuable time that could be utilized 555. ISO/RTO Council states that,
propose that the Measures and Levels of to re-adjust the system by other, more although TLR should not be considered
Non-Compliance specific to IROL effective, operating measures would be an emergency procedure,231
violations should be commensurate lost.’’ 228 Requirement R1 of IRO–006–3 does not
with the magnitude, duration, frequency require use of TLR procedures and
and causes of the violation. Further, as iii. Comments permits the implementation of existing
discussed above, we propose that the 552. NERC explains that the TLR policies and procedures to correct
ERO conduct a survey on IROL practices procedure is a method of addressing the transmission loading.232 It further states
and experiences. The Commission may that Requirement R1 appropriately
propose further modifications to IRO– 224 The equivalent Interconnection-wide identifies a reliability coordinator as
005–1 based on the survey results. transmission loading relief procedures for use in being responsible for actions related to
WECC and ERCOT are known as ‘‘WSCC
h. Reliability Coordination— Unscheduled Flow Mitigation Plan’’ and Section 7
transmission loading. As a result,
Transmission Loading Relief (IRO–006– of the ‘‘ERCOT Protocols,’’ respectively.
225 The NERC glossary defines Interchange 229 NERC Comments at 49.
3) Distribution Calculator as ‘‘The mechanism used by 230 Id. at 50.
i. NERC Proposal reliability coordinators in the Eastern 231 In its comments on EOP–002–0 regarding
Interconnection to calculate the distribution of Capacity and Energy Emergencies, ISO/RTO
549. IRO–006–3 ensures that a Interchange Transactions over specific Flowgates. It Council elaborates that it ‘‘agrees with FERC Staff’s
reliability coordinator has a coordinated includes a database of all Interchange Transactions concerns that TLRs are not appropriate for
and a matrix of the Distribution Factors for the addressing actual transmission emergencies,
method to alleviate loadings on the Eastern Interconnection.’’ NERC glossary at 6. because TLRs are not a method that can be used
transmission system if it becomes
226 We note that on September 29, 2006, NERC quickly or predictably enough in situations where
congested to avoid limit violations. submitted Version 2 of the same Reliability an operating security limit is close to, or actually
IRO–006–3 establishes a detailed Standard (ERO–006–2) in Docket No. ER06–1545– being violated.’’
000, seeking approval of its TLR procedure 232 IRO–006–1, Requirement R1 states, ‘‘[a]
Transmission Loading Relief (TLR) pursuant to section 205 of the FPA. [r]eliability [c]oordinator shall take appropriate
process for use in the Eastern 227 Blackout Report, Recommendation No. 31 at
actions in accordance with established policies,
Interconnection to alleviate loadings on 163. procedures, authority, and expectations to relieve
the system by curtailing or changing 228 Staff Preliminary Assessment at 69. transmission loading.’’
because Requirement R1 clearly does potentially mislead a transmission use of the procedure and limitations on
not specify the use of TLR, and instead operator or reliability coordinator that is applicable facilities which are unusual
explicitly calls for the use of appropriate attempting to mitigate an IROL violation in a Reliability Standard. The
tools available to the reliability to first deploy the TLR procedure only Commission believes that these issues
coordinator, the ISO/RTO Council to find out later that other more effective are part of the transition to mandatory
believes that IRO–006–3 allows entities operating measures should have been Reliability Standards and are mainly
sufficient flexibility to ensure reliability. used. In addition, we duly note ISO/ administrative in nature. The
556. However, ISO/RTO Council RTO Council’s comment that the Commission believes that the WECC
explains the limitations of TLR in EOP– applicability to an ISO or RTO region of approach is superior to the national
002–0 that most ISOs and RTOs use re- any Reliability Standard that provides standard because it uses phase angle
dispatch to correct SOL and IROL for the use of TLR procedures is not regulators, series capacitors and back-to-
violations instead of TLR procedures clear, and if applied, could actually be back DC lines to mitigate contingencies
because re-dispatch is superior to TLR detrimental to reliability. Since the without curtailing transactions. The
procedures for the purposes of ensuring system is subject to cascading outages Commission proposes to approve its
system reliability. It further states that when it is in IROL violation, we have use.
as a result, the applicability to an ISO particular concern regarding the use of 565. The Commission notes that
or RTO region of any Reliability TLR to mitigate IROL violations and less Requirement R2.3 identifies section 7 of
Standard that provides for the use of so on its use on SOLs since the latter the ERCOT Protocols as an equivalent
TLR procedures is not clear, and if would not result in cascading outages. load relief procedure for use in the
applied, could actually be detrimental 561. While NERC suggests that Texas Interconnection. The Protocol
to reliability. transmission operators and reliability contains significant details about the
557. ReliabilityFirst agrees in general coordinators understand that the TLR ERCOT market that are unusual in a
with the Staff Preliminary Assessment. procedure is not the sole method for Reliability Standard. The Commission
NYSRC comments that the concerns mitigating an SOL or IROL violation, the believes that these issues are part of the
articulated by staff are not significant Commission notes that the Blackout transition to mandatory Reliability
enough to prevent approval of the Report suggests otherwise with regard to Standards and are mainly
proposed Reliability Standard. MRO the causes of the August 2003 cascading administrative in nature. The
believes that IRO–006–3 should be blackout since the operator was first Commission believes that the ERCOT
modified to clarify the use of TLR as attempting to use TLR to mitigate an zonal LMP approach is superior to the
proposed by the Staff Preliminary IROL violation only to find out it was national standard in that it uses
Assessment due to the identified ineffective.234 This led the Blackout generation re-dispatch and pricing to
interpretation issue. Task Force to recommend that NERC mitigate congestion without curtailing
558. CenterPoint contends that the ‘‘clarify that the [TLR] process should transactions. The Commission proposes
ERCOT region should be explicitly not be used in situations involving an to approve its use.
exempted from these [IRO] Reliability actual violation of an Operating Security 566. While the Commission has
Standards since ERCOT does not use Limit.’’ 235 identified concerns with regard to IRO–
TLR procedures. Instead, it manages 562. We propose that the Reliability 006–3, we believe that the proposal
congestion using procedures relevant to Standard should also clearly provide the serves an important purpose in ensuring
ERCOT market rules. flexibility for ISOs and RTOs to rely on reliability coordinators have a
re-dispatch, as suggested by ISO/RTO coordinated method for alleviating
Council. Accordingly, we propose to loadings on the transmission system
559. The Commission proposes to direct that NERC modify IRO–006–3 to when it becomes too congested to avoid
approve IRO–006–3 as mandatory and (1) include a clear warning that TLR potential SOL and IROL violations. It
enforceable. In addition, we propose to procedure is an inappropriate and also includes a regional difference for
direct that NERC develop modifications ineffective tool to mitigate IROL reporting market flow information to the
to the Reliability Standard as discussed violation and (2) to identify effective Interchange Distribution Calculator. The
below. alternatives to use of the TLR procedure Commission believes that it is important
560. The Commission notes that in situations involving an IROL for NERC to clarify that the TLR process
NERC agrees that the TLR procedure is violation. is not the only, and perhaps not even
usually not effective by itself as a 563. With regard to CenterPoint the preferred, method to mitigate an
control measure to mitigate an IROL suggestion that the ERCOT region be SOL and especially IROL violation. The
violation, the procedure is not intended explicitly exempted from compliance proposed Requirements set forth in
to be effective in this manner and that with IRO–006–3, we note that our IRO–006–3 are sufficiently clear and
it be combined with other effective regulations require that any such objective to provide guidance for
methods such as reconfiguration, re- proposal must be developed through an compliance.
dispatch or load shedding until relief open, stakeholder process and 567. Accordingly, giving due weight
requested by the TLR process is submitted to the Commission by the to the technical expertise of the ERO
achieved.233 The Commission is ERO. and with the expectation that the
concerned, however, that the 564. The Commission notes that Reliability Standard will accomplish the
Requirements in IRO–006–3 do not Requirement R2.2 identifies the ‘‘WSCC purpose represented to the Commission
sufficiently convey the availability of Unscheduled Flow Mitigation Plan’’ 236 by the ERO and that it will improve the
alternatives, nor highlight the as an equivalent load relief procedure reliability of the nation’s Bulk-Power
inefficiency of TLR procedure which for use in the Western Interconnection. System, the Commission proposes to
requires a lead time for implementation The referenced document contains approve Reliability Standard IRO–006–
much longer than the allowable 30 governance, compensation, charges for 3 as mandatory and enforceable. In
minutes to return the system from IROL addition, pursuant to section 215(d)(5)
violation to a secure state. This could 234 SeeBlackout Report at 63. of the FPA and § 39.5(f) of our
235 Id.
at 163. regulations, the Commission proposes to
233 NERC Comments at 49. 236 WSCC is an old reference to WECC. direct that NERC submit a modification
to IRO–006–3 that: (1) Includes a clear iv. Commission Proposal k. Notifications and Information
warning that TLR procedure is an 571. The Commission believes that Exchange Between Reliability
inappropriate and ineffective tool to the comments and information Coordinators (IRO–015–1)
mitigate IROL violations; (2) identifies presented by MISO and PJM are i. NERC Proposal
in a Requirement the available persuasive. However, before acting on
alternatives to use of the TLR procedure 578. Proposed Reliability Standard
this regional difference, the Commission IRO–015–1 establishes Requirements for
to mitigate an IROL violation; and (3) invites comments to assure that we have
includes Measures and Levels of Non- a reliability coordinator to share and
a full and complete record on which to exchange reliability-related information
Compliance that address each base our decision.
Requirement. among its neighbors and participate in
572. The Commission notes that agreed-upon conference calls and other
i. Regional Difference to IRO–006–3: MISO and PJM indicate that their communication forums with adjacent
PJM/MISO/SPP Enhanced Congestion competition concerns are being reliability coordinators. This exchange
Management (Curtailment/Reload/ addressed in discussions with NERC of reliability-related information among
Reallocation) and other relevant entities. The reliability coordinators facilitates
Commission prefers that PJM, MISO and situation awareness.
i. NERC Proposal others continue to pursue a negotiated
resolution rather than having the ii. Staff Preliminary Assessment
568. IRO–006–003 provides for a
regional difference for MISO, PJM and Commission impose a solution on 579. No substantive issues were
SPP. NERC explains that this regional market participants. Accordingly, the identified for IRO–015–1.
difference is needed to allow RTO Commission will not propose to
iii. Comments
market practices, simplify transaction approve or remand this regional
difference. 580. No comments were submitted
information requirements for market
regarding IRO–015–1.
participants, and provide reliability j. Procedures, Processes, or Plans to
coordinators with appropriate Support Coordination Between iv. Commission Proposal
information for security analysis and Reliability Coordinators (IRO–014–1) 581. The Commission believes that
curtailments, reloads, reallocations and IRO–015–1 contains sufficient
i. NERC Proposal
redispatch requirements. Requirements to ensure that reliability
573. The stated purpose of IRO–014– coordinators inform and exchange
ii. Staff Preliminary Assessment 1 is to ensure that each reliability information with other reliability
569. This regional difference was not coordinator’s operations are coordinated coordinators, as the only applicable
addressed in the Staff Preliminary such that they will not have an adverse entity, to ensure coordinated operations.
Assessment. reliability impact on other reliability 582. For the reasons discussed above,
coordinator areas and to preserve the the Commission proposes to approve
iii. Comments reliability benefits of interconnected Reliability Standard IRO–015–1 as just,
operation. Specifically, IRO–014–1 reasonable, not unduly discriminatory
570. MISO and PJM, in a joint filing, ensures energy balance and
contend that there is unduly or preferential, and in the public
transmission by requiring a reliability interest.
discriminatory treatment of the market coordinator to have operating
flows of MISO and PJM versus the procedures, processes or plans for the l. Coordination of Real-Time Activities
generation-to-load impacts of non- (1) exchange of operating information Between Reliability Coordinators (IRO–
market entities in the application of the and (2) coordination of operating plans. 016–1)
TLR standard. They argue that NERC i. NERC Proposal
should modify IRO–006–3 and the ii. Staff Preliminary Assessment
MISO/PJM regional difference to 583. IRO–016–1 establishes
574. No substantive issues were Requirements for coordinated real-time
require: (1) Netting of generation-to-load identified for IRO–014–1.
impacts; (2) reporting to the Interchange operations, including: (1) Notification of
Distribution Calculator all net iii. Comments problems to neighboring reliability
generation-to-load impacts for both coordinators and (2) discussions and
575. No comments were submitted
market and non-market transmission decisions for agreed-upon solutions for
regarding IRO–014–1.
providers; and (3) modifying the implementation. It also requires a
curtailment threshold to a standard iv. Commission Proposal reliability coordinator to maintain
percentage for all impacts thus reported 576. The Commission believes that records of its actions. Where a
to the Interchange Distribution IRO–014–1 contains sufficient details in disagreement arises, IRO–016–1 requires
Calculator to a level that is technically the specification of the required that reliability coordinators work with
feasible to implement and on a non- procedures, processes or plans for a one another until a system problem is
discriminatory basis. MISO and PJM reliability coordinator to support resolved or implement the more
also note that they, as well as SPP, have coordination among it neighbors, and conservative solution.
been working through various groups to agreements that all reliability ii. Staff Preliminary Assessment
achieve a consensus on these changes. coordinators, as the only applicable 584. No substantive issues were
According to MISO and PJM, these entity, must take the indicated actions identified for IRO–016–1.
efforts were fruitful, but they were to ensure coordinated and reliable
unable to complete the changes prior to operations. iii. Comments
NERC’s April 6, 2006 submission of its 577. For the reasons discussed above, 585. No comments were submitted
Version 0 reliability standards for the Commission proposes to approve regarding IRO–016–1.
Commission approval. The Commission Reliability Standard IRO–014–1 as just,
believes that SPP could experience the reasonable, not unduly discriminatory iv. Commission Proposal
same problems identified by MISO and or preferential, and in the public 586. The Commission believes that
PJM. interest. IRO–016–1 contains sufficient
requirements for a reliability elements in the calculation processes standards that require the most
coordinator to inform, discuss and and development of modeling immediate revision.
identify a solution with other reliability assumptions, and deficiencies in data 593. CenterPoint advocates
coordinators to prevent or resolve a exchange that may have a negative eliminating many of the MOD
problem that requires joint actions from impact on both transmission system Reliability Standards or consolidating
all affected reliability coordinators as reliability and competition.242 them into planning or operating
the only applicable entity. It also clearly 590. The industry also acknowledged standards. CenterPoint reasons that, to
articulates binding and conservative this problem and has taken steps to the extent the process-oriented
corrective actions to be taken in the address the lack of consistency and Reliability Standards are necessary, the
event that an agreement cannot be transparency in the way ATC is ‘‘fill-in-the-blank’’ standards are
reached among them. calculated. NERC formed a Long-Term necessary; however, it is impractical to
587. For the reasons discussed above, Available Flowgate Capacity 243 (AFC)/ require that each region use identical
the Commission proposes to approve ATC Task Force to review NERC’s practices in building and validating its
Reliability Standard IRO–016–1 as just, standards on ATC, which issued a final models. CenterPoint adds that, should
reasonable, not unduly discriminatory report in 2005.244 Based on the the Reliability Standards be approved
or preferential, and in the public recommendations in the NERC Report, by the Commission, ERCOT should be
interest. NERC has begun two Standards exempt from those that address transfer
Authorization Request (SAR) capability because ERCOT does not
8. MOD: Modeling, Data, and Analysis
proceedings to revise the standards on have any inter-control area transfers and
a. Overview ATC.245 NAESB has also begun a does not use the NERC methodologies.
588. The Modeling, Data, and proceeding to develop business practice
Analysis group of Reliability Standards standards to enhance the processing of Commission Proposal
are intended to standardize transmission service requests, which 594. As we discussed in the Common
methodologies and system data needed affects the ATC calculation. Issues section above describing fill-in-
for traditional transmission system Staff Preliminary Assessment the-blank Reliability Standards, we
operation and expansion planning, propose to seek additional information
reliability assessment, and the 591. Staff expressed concerned that before acting on the Reliability
calculation of available transmission fourteen of the twenty-three Reliability Standards that require the regional
capacity (ATC) in an open access Standards in this group apply to reliability organization to provide
environment. The 23 standards may be regional reliability organization, which criteria on procedures.
grouped into four distinct categories. is not a user, owner, or operator of the 595. While we agree with CenterPoint
The first category covers methodology Bulk-Power System. that some of the MOD Reliability
and associated documentation, review, General Comments Standards could be grouped into
and validation of Total Transfer 592. NERC comments that it has a planning or operating standards, we will
Capability (TTC), ATC, Capacity Benefit team in place to address the regional not propose any such modification, but
Margin (CBM), and Transmission reliability organization applicability rather, leave it to the discretion of the
Reliability Margin (TRM) issue and will submit an action plan ERO. Regarding CenterPoint’s
calculations.237 The second category and schedule in November 2006 for suggestion that ERCOT should be
covers steady-state and dynamics data completing the fill-in-the-blank exempt from Reliability Standards that
and models.238 The third category standards. NERC expects that it will address available transfer capability, the
covers actual and forecast demand take approximately three years to Commission will consider any regional
data.239 The fourth category covers the complete the process, and will prioritize difference at the time it is submitted by
verification of generator real and NERC for Commission review.
reactive power capability.240 242 Id., 71 FR at 32654 and 32667. Therefore, if ERCOT wishes to request a
OATT Reform NOPR and the MOD
243 AFC is a methodology that first calculates regional difference it must do so
Standards
available capacity on a flowgate-AFC, and transfers through the ERO process.
that value into ATC by dividing AFC with the
589. The Commission has been associated flowgate distribution factor. After ATC is b. Documentation of Total Transfer
determined, TTC is calculated from ATC for posting Capability and Available Transfer
considering ATC, TTC, CBM and TRM on OASIS. This method is different from NERC’s
calculation issues in Docket Nos. original ATC calculation, where TTC is calculated Capability Calculation Methodologies
RM05–17–000 and RM05–25–000, and in a first step and then used to determine ATC by (MOD–001–0)
is addressing them in the OATT Reform reducing TTC with capacity needed for existing
commitments and reserve margins. i. NERC Proposal
NOPR.241 Among other things, the 244 The NERC Report made recommendations for
OATT Reform NOPR discusses the need greater consistency and greater clarity in the
MOD–001–0 is to promote the
for consistency and transparency of calculation of ATC/AFC. The task force also
recommended greater communication and consistent and uniform application of
ATC, TTC, CBM, and TRM. It proposes
coordination of ATC/AFC information to ensure transfer capability calculations among
that public utilities, working through that neighboring entities exchange relevant transmission system users. The
NERC/NAESB, would use the guidelines information. See NERC, Long-Term AFC/ATC Task
Reliability Standard requires the
in the OATT Reform NOPR to revise the Force Final Report (2005) (NERC Report) at 2,
available at: ftp://www.nerc.com/pub/sys/all_updl/ regional reliability organizations to
relevant standards and business
mc/ltatf/LTATF_Final_Report_Revised.pdf. develop their respective methods for
practices, and asks for comments on 245 The first SAR proceeding proposes changes to
determining TTC and ATC and to make
certain proposals. It also recognizes that the existing standards on ATC to, among other
those methodologies available to others
there are still many unspecified things, further establish consistency in the
calculation of ATC and to increase the clarity of for review. The Reliability Standard
237 MOD–001–0 through MOD–009–0.
each transmission provider’s ATC calculation contains two Requirements directing
238 MOD–010–0
methodology. The second SAR proceeding proposes each regional reliability organization to:
through MOD–015–0. certain changes to NERC’s existing CBM and TRM
standards and calls for greater regional consistency
(1) Develop and document a regional
and transparency in how CBM and TRM are treated TTC and ATC methodology in
241 OATT Reform NOPR, 71 FR 32636 at 32658. in transmission providers’ ATC calculations. conjunction with its members; and (2)
post the most recent version of its TTC and undue competitive impacts in the commitments (ETC) 249 could also create
and ATC methodology at a Web site way the Reliability Standard is currently an undue negative impact on
accessible by NERC, the regional proposed. TAPS urges the Commission competition. For example, NERC has
reliability organizations, and to make the calculations related to this not proposed either a definition or
transmission users. Reliability Standard transparent, Reliability Standard on how ETC should
597. The first Requirement specifies consistent, and regionally-based. be determined. This could allow
nine items that the regional reliability transmission providers to set aside more
organization must include in its iv. Commission Proposal
capacity for native load than is needed,
methodology for determining its TTC 602. MOD–001–0 is a ‘‘fill-in-the- and ultimately block capacity that
and ATC values. Most of these items blank’’ standard that requires each would otherwise be available to
call for descriptions on how TTC and regional reliability organization to unaffiliated transmission customers.
ATC values are determined and what develop its respective methods for This also gives broad discretion to a
assumptions are used. Two items determining TTC and ATC and to make transmission provider to determine how
require the regional reliability those methodologies available to others to model power transfers and associated
organization to take into account the for review. Because the regional loop flows that impact the neighboring
reservations and schedules for procedures have not been submitted to systems reliability. We believe that this
transactions occurring inside and the Commission, it is not possible to Reliability Standard should, at a
outside the transmission provider’s determine at this time whether MOD– minimum, provide a framework for the
system. One item specifies a time and 001–0 satisfies the statutory requirement ATC, TTC, and ETC calculation.
frequency for calculating and posting that a proposed Reliability Standard be 605. MOD–001–0 requires that the
TTC and ATC values. ‘‘just, reasonable, not unduly regional reliability organization develop
discriminatory or preferential, and in and post its methodology on TTC and
ii. Staff Preliminary Assessment the public interest.’’ Accordingly, the ATC, but only requires a narrative
598. Staff identified MOD–001–0 as a Commission will not propose to accept description of a few elements of the TTC
‘‘fill-in-the-blank’’ standard that applies or remand this Reliability Standard and ATC calculation. We believe that
to the regional reliability organization. until the ERO submits additional this Reliability Standard should include
Staff expressed concern that industry information. In the interim, compliance a requirement that applicable entities
historically used inconsistent with MOD–001–0 should continue on make available a comprehensive list of
calculation methodologies and stated its current basis, and the Commission assumptions and contingencies
that this inconsistency could have an considers compliance with the underlying ATC and TTC calculations.
undue negative impact on competition. Reliability Standard to be a matter of We believe that such documentation
good utility practice. Although we do should include mathematical
iii. Comments
not propose any action with regard to algorithms, process flow diagrams, data
599. Although NERC acknowledges MOD–001–0 at this time, we address inputs, identification of flowgates, and
that proposed Reliability Standard our concerns regarding this Reliability modeling assumptions used to perform
MOD–001–0 needs improvement, it Standard below. The concerns we the TTC and ATC calculations,
urges that the Commission approve it. discuss below are consistent with the consistent with those proposed in the
NERC explains that the final version of OATT Reform NOPR.246 OATT Reform NOPR.
the ATC/TTC/AFC Revision SAR 603. The Reliability Standard only 606. We are further concerned that the
proposes a method for calculating ATC requires that the regional reliability Reliability Standard does not clearly
and requires that specific reliability organization document its ATC and TTC define the data to be shared among
practices be incorporated into the ATC methodology and post that transmission service providers. We
calculation and coordination documentation. The Reliability believe that MOD–001–0 could be
methodologies. Further, NERC advises Standard does not contain clear improved by identifying a detailed list
that a requirement will be added to Requirements on how ATC and TTC of information to be shared. This is
enhance documentation of the should be calculated, which has consistent with the OATT Reform
calculation. resulted in diverse interpretations of NOPR, which proposes that, at a
600. MRO acknowledges that, because ATC, TTC, and the development of minimum, the following data should be
TTC and ATC values must satisfy various calculation methodologies, exchanged among transmission
certain principles, which balance both modeling assumptions, and data providers for the purposes of ATC
technical and commercial issues from exchange protocols by various modeling: (1) Load levels; (2)
each of the regions, there may be entities.247 This creates potential transmission planned and contingency
differences in the calculation of these reliability issues and an opportunity to outages; (3) generation planned and
values from the different regions. unduly discriminate against contingency outages; (4) base generation
However, MRO adds that the parties in competitors. dispatch; (5) existing transmission
the Eastern Interconnection must agree 604. Further, the different approaches reservations, including counterflows; (6)
to the values, calculations, and in calculation of ATC/AFC,248 TTC, and ATC calculation frequency; and (7)
methodologies which flow across the lack of clear requirements for source/sink modeling identification.
borders of various regions and system calculation of existing transmission 607. In addition, the Commission
operators. MRO states that these should notes that MOD–001–0 inappropriately
246 OATT Reform NOPR at ¶ 155–70.
be transparent and agreements should combines the requirements for TTC and
247 For example, there are two primary ATC
be based on rational, technical ATC methodology into one Reliability
calculation methodologies: the contract path
requirements. Standard. TTC and ATC serve two
approach and the flowgate approach. However, the

601. ReliabilityFirst submits that it ATC values that result from application of either different purposes and are calculated
generally agrees with staff’s evaluation method should largely be the same if consistent through different calculation processes.
that, to ensure consistency, procedures data inputs and modeling assumptions are used.
See OATT Reform NOPR, 71 FR 32653. We believe that MOD–001–0 should
developed by the individual regions 248 Available Flowgate Capability is a method
need to be combined. Similarly, TAPS widely used in the Eastern Interconnection but 249 ETC includes transmission capacity set aside
advises that there are significant flaws there is no NERC definition for that term. for both native load and transmission reservations.
address only the ATC and AFC contingency outages and topology as iii. Comments
requirements while the TTC those used for expansion planning and
requirements should be addressed in a 613. The Commission received no
operations. Consistent with the OATT
separate Reliability Standard such as specific comments regarding MOD–002–
Reform NOPR, we believe that the long-
FAC–012–1, as discussed below. 0.
term ATC and AFC models should rely
608. The NERC glossary does not to the maximum extent possible on the iv. Commission Proposal
substantially differentiate between the same assumptions regarding new
definition of TTC (as used in MOD– 614. MOD–002–0 is a ‘‘fill-in-the-
transmission and generation facility blank’’ Reliability Standard that requires
001–0) 250 and transfer capability (as additions and retirements as those used
used in FAC–012–1).251 Thus, there are each regional reliability organization to
in the planning for expansion. develop and implement a procedure to
two Reliability Standards to measure
Specifically, MOD–001–0 should periodically review and ensure that a
essentially the same thing: One
contain a Requirement that long-term transmission service provider’s TTC and
Reliability Standard calculates TTC
using one set of data and modeling ATC (one year and longer) be based on ATC calculations comply with regional
assumptions presumably for use in the calculation that uses the same power TTC and ATC methodologies and
evaluating transmission service flow models, assumptions regarding criteria. Because the regional procedures
requests, and another Reliability load, generation dispatch, special have not been submitted to the
Standard calculates transfer capability protection systems, post contingency Commission, it is not possible to
for in-house use in planning and switching, and transmission and determine at this time whether MOD–
operations studies. This will not only generation facility additions and 002–0 satisfies the statutory requirement
cause confusion, but also opportunities retirements as those used in the that a proposed Reliability Standard be
for discrimination against transmission expansion planning for the same time ‘‘just, reasonable, not unduly
customers. We believe that the TTC frame. discriminatory or preferential, and in
calculation methodology should be 610. Finally, the applicability section the public interest.’’ Accordingly, the
addressed under FAC–012–1, which identifies that the Reliability Standard Commission will not propose to
standardizes transfer capability applies to regional reliability approve or remand this Reliability
methodology. organizations. Consistent with our Standard until the regional procedures
609. We reiterate our concern discussion above, we believe that NERC are submitted. In the interim,
expressed in the OATT Reform NOPR should identify the applicable entities compliance with MOD–002–0 should
that modeling assumptions are a crucial continue on a voluntary basis, and the
in terms of users, owners, and operators
element in the calculation of ATC.252 Commission considers compliance with
of the Bulk-Power System.253
We believe that NERC should develop a the Reliability Standard to be a matter
set of consistent assumptions as a part c. Review of Transmission Service of good utility practice.
of MOD–001–0 for use in ATC and AFC Provider Total Transfer Capability and d. Regional Procedure for Input on Total
determinations. Consistent with the Available Transfer Capability Transfer Capability and Available
OATT Reform NOPR, we believe that Calculations and Results (MOD–002–0) Transfer Capability Methodologies and
the assumptions in the calculation of
i. NERC Proposal Values (MOD–003–0)
ATC and AFC should be used
consistently among transmission i. NERC Proposal
611. MOD–002–0 concerns the review
providers to the maximum extent of transmission service providers’ 615. MOD–003–0 defines how a
practicable. In general, the Commission compliance with the regional transmission user can submit its
believes that the assumptions used in
methodologies for calculating TTC and concerns regarding ATC/TTC
the determination of ATC and AFC
ATC. It requires that the regional calculation methodologies and values. It
should be consistent with those used for
reliability organization: (1) Develop and requires each regional reliability
planning the expansion or operation of
implement a procedure to periodically organization to: (1) Develop and
the Bulk-Power System. Consequently,
review and ensure that the TTC and document a procedure on how a
the models for short- and long-term ATC
ATC calculations and resulting values transmission user can input their
and AFC calculation should be
developed by transmission service concerns or questions regarding TTC
developed using consistent assumptions
providers comply with the regional TTC and ATC calculations including the TTC
regarding the load level, generation
and ATC methodology and applicable and ATC values, and how these
dispatch, transmission and generation
regional criteria; (2) document the concerns will be addressed; and (2)
facilities maintenance schedules,
results of its periodic review of TTC and make its procedure for receiving and
250 Total Transfer Capability is defined in the ATC; and (3) provide the results of its addressing these concerns available to
NERC glossary as ‘‘[t]he amount of electric power most current reviews to NERC on other regional reliability organizations,
that can be moved or transferred reliably from one request within 30 calendar days. NERC and transmission users on its
area to another area of the interconnected Web site.
transmission systems by way of all transmission ii. Staff Preliminary Assessment
lines (or paths) between those areas under specified ii. Staff Preliminary Assessment
system conditions.’’ NERC glossary at 14.
251 Transfer Capability is defined in NERC
612. Staff identified no substantive 616. The Staff Preliminary
glossary as ‘‘[t]he measure of the ability of issues other than the fact that MOD– Assessment noted that MOD–003–0 is a
interconnected electric systems to move or transfer 002–0 is a ‘‘fill-in-the-blank’’ standard ‘‘fill-in-the-blank’’ standard. It also
power in a reliable manner from one area to another and that the standard applies to the raised concern that MOD–003–0 does
over all transmission lines (or paths) between those

areas under specified system conditions. The units
regional reliability organization. not provide a consistent procedure for
of transfer capability are in terms of electric power, transmission users to input concerns or
generally expressed in megawatts (MW). The 253 We note that our observation here also applies
questions regarding the methodology for
transfer capability from ‘Area A’ to ‘Area B’ is not to MOD–002, MOD–003, MOD–004, MOD–005,
generally equal to the transfer capability from ‘Area MOD–008, MOD–009, MOD–011, MOD–013, MOD–
calculation of TTC and ATC and
B’ to ‘Area A.’ ’’ NERC glossary at 15. 014, MOD–015, MOD–016, MOD–024, and MOD– resulting TTC and ATC values, nor does
252 OATT Reform NOPR at P 166. 025. it provide a consistent procedure for
how these questions or concerns will be along with their use in determining optional to the transmission provider.
addressed. CBM values. These requirements specify TAPS urges the Commission to make
that calculation of CBM be consistent the calculations related to this standard
iii. Comments
with the generation planning criteria, transparent, consistent, and regionally-
617. The Commission received no and that generation outages simulated in based.
comments regarding MOD–003–0. a transmission provider’s CBM
calculation be restricted to those iv. Commission Proposal
generators located within the 624. MOD–004–0 is a ‘‘fill-in-the-
618. MOD–003–0 is a ‘‘fill-in-the- transmission provider’s system. It is also blank’’ Reliability Standard that requires
blank’’ standard that requires each required that CBM should be preserved each regional reliability organization to
regional reliability organization to only for the load within the control area. develop and document a regional CBM
develop and document a procedure to The allocation process of the CBM methodology. Because the regional CBM
on how a transmission user can input its should be identified. In addition, it methodologies have not been submitted
concerns regarding the TTC and ATC requires that the sum of the CBM values to the Commission, it is not possible for
methodologies of a transmission service allocated to all interfaces at one control determine at this time whether MOD–
provider. Because the regional area shall not exceed the portion of the 004–0 satisfies the statutory requirement
procedures have not been submitted to generation reliability requirement that is that a proposed Reliability Standard be
the Commission, it is not possible to to be provided from outside resources. ‘‘just, reasonable, not unduly
determine at this time whether MOD– The remaining items require a discriminatory or preferential, and in
003–0 satisfies the statutory requirement description of the rationale regarding the public interest.’’ Accordingly, the
that a proposed Reliability Standard be the assumptions used for CBM Commission will not propose to accept
‘‘just, reasonable, not unduly calculation. Finally, it requires a or remand this Reliability Standard
discriminatory or preferential, and in description of the formal process and until the regional procedures are
the public interest.’’ Accordingly, the rational for the regional reliability submitted. In the interim, compliance
Commission will not propose to accept organization to grant any variances to with MOD–004–0 should continue on a
or remand this Reliability Standard individual transmission providers from voluntary basis, and the Commission
until the regional procedures are the regional reliability organization’s considers compliance with the
submitted. In the interim, compliance CBM methodology. Reliability Standard to be a matter of
with MOD–003–0 should continue on a good utility practice.
voluntary basis, and the Commission 625. Although we do not propose any
considers compliance with the 621. The Staff Preliminary action with regard to MOD–004–0 at
Reliability Standard to be a matter of Assessment noted that MOD–004–0 is a this time, we address our concerns
good utility practice. ‘‘fill-in-the-blank’’ standard. Further, regarding the Reliability Standard
while MOD–004–0 requires each below.
e. Documentation of Regional Reliability regional reliability organization to
Organization Capacity Benefit Margin 626. We share TAPS’ concern that
develop and document a regional CBM MOD–004–0 may contain significant
Methodologies (MOD–004–0) methodology, it does not specify how flaws and may unduly impact
i. NERC Proposal CBM is determined and allocated across competition. The Commission
619. NERC states that the purpose of transmission paths. Staff expressed expressed similar concerns with the
MOD–004–0 is to promote the concern that the Reliability Standard CBM calculation in the OATT Reform
consistent and uniform application of does not address the effect of associated NOPR. The lack of consistent criteria
transmission transfer capability margin. transmission service requirements and and clarity with regard to the entity on
MOD–004–0 addresses the development curtailment provisions on transmission whose behalf CBM has been set aside
of a regional methodology for CBM.254 customers nor does it specify the criteria has the potential to result in the
The Reliability Standard requires each used in determining whether or not to transmission provider setting aside
regional reliability organization to: (1) include generation resources, reserves, capacity that it might not otherwise
Develop and document a regional CBM and loads in its methodology as need to, thus increasing costs for native
methodology in conjunction with its described in four of the Requirements load customers and blocking third party
members; and (2) post the most recent (R1.5, R1.6, R1.9, and R1.10). uses of the transmission system.255
version of its CBM methodology on a iii. Comments 627. We also share TAPS’ concern
Web site accessible by NERC, regional 622. NERC points out that the CBM/ that the calculations related to this
reliability organizations, and TRM Revisions Standard Authorization Reliability Standard must be transparent
transmission users. Request (SAR) proposes requiring crisp and consistent. We are concerned with
620. The first Requirement specifies and clear calculation documentation the latitude that transmission providers
ten items that the regional reliability and making various components of the have when preserving a portion of
organization must include and explain methodology mandatory to ensure transfer capability for CBM. There are
in its CBM calculation method. In consistency.
addition, the Reliability Standard 623. TAPS agrees with staff’s
255 The Commission has explained that the pro
requires that other regional reliability forma OATT requires both transmission customers
evaluation of MOD–004–0. TAPS states and transmission providers using the transmission
organization-specific items be explained that the proposed Reliability Standard system to serve network load (including bundled
has significant flaws and will harm retail native load) to designate their resources and
254 The NERC glossary defines ‘‘capacity benefit loads so that the transmission customers and
competition if accepted in its current
margin’’ or ‘‘CBM’’ as the amount of firm transmission providers would have no incentive to
transmission transfer capability preserved by a form. For example, TAPS refers to the designate network resources above their needs and,
transmission provider for load serving entities significant potential for abuse because in so doing, tie up valuable transmission capacity.
whose loads are located on the transmission service transmission providers have flexibility Aquila Power Corp. v. Entergy Services, Inc., 90
provider’s system, to enable access by the load FERC ¶ 61,260, reh’g denied, 92 FERC ¶ 61,064
serving entity to generation from interconnected
in the calculation of CBM. Further, (2000), reh’g denied, 101 FERC¶ 61,328 (2002), aff’d
systems to meet generation reliability requirements. TAPS questions how CBM can be sub nom. Entergy Services, Inc. v. FERC, 375 F.3d
NERC glossary at 2. viewed as a Reliability Standard if it is 1204 (D.C. Cir. 2004).
no consistent industry-wide standards provider’s CBM components are organization, NERC, and transmission
for determining how much transfer calculated consistently with its users.
capability should be set aside as CBM planning criteria, and a Requirement
and how that amount should be that CBM values are at least annually
allocated to interfaces. Therefore, we updated and made available to the 634. Staff stated that it was concerned
believe that MOD–004–0 could be regional reliability organization, NERC, that proposed Reliability Standard
improved by providing more specific and transmission users. MOD–006–0 does not require a
Requirements on how CBM should be consistent and uniform calculation of
ii. Staff Preliminary Assessment CBM.
determined and allocated to interfaces.
628. In response to TAPS’s question 630. Staff Preliminary Assessment iii. Comments
about how CBM can be viewed as a noted that although MOD–005–0
Reliability Standard if it is optional to requires each regional reliability 635. The Commission received no
the Transmission Provider, our organization to review the CBM comments regarding MOD–006–0.
understanding is that transmission calculations and the resulting values, it iv. Commission Proposal
providers that opt not to use CBM could does not require a consistent and
636. The Commission proposes to
instead set aside transmission margin uniform calculation of CBM.
approve MOD–006–0 as mandatory and
(needed to meet the generation
iii. Comments enforceable. In addition, we propose to
Reliability Standard) either through ETC
631. The Commission received no direct NERC to modify the Reliability
or TRM. Obviously, CBM is not the only
comments regarding MOD–005–0. Standard, as discussed below.
way to preserve transmission margin.
637. As discussed above regarding
However, if the Reliability Standard is iv. Commission Proposal MOD–004–0, we are concerned that
not clear regarding the method to
632. MOD–005–0 is a ‘‘fill-in-the- there is an opportunity to double-count
calculate transmission margin, it may
blank’’ standard that requires the transmission margins CBM and TRM,
cause double-counting of transmission
regional reliability organization to which will result in lower ATC values.
margins and reduction of ATC.
develop and implement a procedure to Without a clear requirement against
Therefore, we believe that MOD–004–0
review the CBM calculations and the double-counting margins, this may be
could be improved by including a
resulting values and to make the used to prevent non-affiliated third
provision ensuring that CBM, TRM, and
documentation of the results of the CBM party access to the transmission system.
ETC cannot be used for the same
review available to NERC and others. Therefore, we propose to direct the ERO
purpose, such as the loss of the identical
Because the regional procedures have to modify this Reliability Standard to
generation unit. Without a clear
not been submitted to the Commission, include a provision that will ensure that
requirement against double-counting of
it is not possible to determine at this CBM and TRM cannot be used for the
margins causing ATC decrease, there is
time whether MOD–005–0 satisfies the same purpose.
a possibility that such double-counting 638. Requirement R1.2 of MOD–006–
may be used to prevent the non- statutory requirement that a proposed
0 calls for CBM to be used by a load-
affiliated third party’s access to the Reliability Standard be ‘‘just,
serving entity that experiences a
transmission system. reasonable, not unduly discriminatory
generation deficiency only when its
or preferential, and in the public
f. Procedure for Verifying Capacity transmission provider simultaneously
interest.’’ Accordingly, the Commission
Benefit Margin Values (MOD–005–0) experiences ‘‘transmission constraints
will not propose to accept or remand
relative to imports of energy on its
i. NERC Proposal this Reliability Standard until the ERO
transmission system.’’ It is our
629. The Reliability Standard submits additional information. In the
understanding that a load-serving entity
specifies the requirements regarding the interim, compliance with MOD–005–0
can experience a generation deficiency
periodic review of a transmission should continue on a voluntary basis,
without the simultaneous transmission
service provider’s adherence to the and the Commission considers
constraint on its transmission service
regional reliability organization’s CBM compliance with the Reliability
provider’s system. Therefore, we
methodology. This Reliability Standard Standard to be a matter of good utility
propose that the ERO modify
has three Requirements. The first practice.
Requirement R1.2 so that concurrent
Requirement calls for each regional g. Procedure for the Use of Capacity occurrence of transmission constraints
reliability organization to develop and Benefit Margin Values (MOD–006–0) is not a required condition for CBM
implement a procedure to review at usage.
i. NERC Proposal
least annually the CBM calculations and 639. Moreover, the Reliability
the resulting values determined by 633. NERC states that the purpose of Standard does not specify how the
member transmission service providers. MOD–006–0 is to promote the generation deficiency is identified. We
The second Requirement mandates that consistent and uniform use of propose to direct that the ERO define
the regional reliability organization transmission transfer capability margins ‘‘generation deficiency’’ based on a
document its CBM review procedure calculations among transmission system specific energy emergency alert level
and make it available to NERC on users. MOD–006–0 requires a (specified in the EOP Reliability
request within 30 calendar days. The transmission service provider to Standards) that triggers CBM usage.
third Requirement specifies that the document and post its procedures on 640. The Commission believes that
regional reliability organization must the use of CBM. Specifically, the CBM should be used only when the
make the results of the most current Reliability Standard requires that each load-serving entity’s local generation
CBM review available to NERC on transmission service provider document capacity is insufficient to meet
request, within 30 calendar days. There its procedure explaining scheduling of balancing Reliability Standards.
are several sub-requirements specifying energy against CBM. It also requires the Moreover, a load-serving entity that has
the regional reliability organization’s transmission service provider to make sufficient generation resources within
CBM review process, including an that procedure available on a Web site its balancing authority to meet the
assurance that the transmission accessible by the regional reliability balancing Reliability Standards should
not need to preserve capacity for CBM required to report the occasions when among transmission service providers
at all. In addition, we believe that CBM CBM is sold on a non-firm basis. The and transmission owners. MOD–008–0
should have a zero value in the second Requirement is that, for any use requires the development and posting of
calculation of non-firm ATC. Based on of CBM concurrent with an energy a regional methodology for TRM, a
this guidance, we propose that NERC emergency situation, the transmission transmission capacity that is preserved
should clarify the Requirements to service provider must disclose and post to provide reasonable assurance that the
address when and how CBM can be circumstances, duration, and the interconnected transmission network
used to reduce transmission provider amount of CBM used on a Web site will remain secure under various system
discretion with regard to CBM usage. accessible by the regional reliability conditions. The Reliability Standard
641. Requirement R1.2 of MOD–006– organization, NERC, and transmission specifies two Requirements for the
0 provides that CBM shall only be used users. regional reliability organization to: (1)
if the load-serving entity calling for its ii. Staff Preliminary Assessment Develop and document a regional TRM
use is experiencing a generation methodology in conjunction with its
deficiency. The applicability section, 644. Staff noted that MOD–007–0 members, and (2) post the most recent
however, applies to only transmission does not specify how CBM should be version of its TRM methodology on a
service providers and not load-serving preserved, which is important to allow Web site accessible by NERC, the
entities. The Commission believes that both transmission providers and regional reliability organizations, and
the applicability section should be transmission customers to meet their transmission users.
expanded to include the entities that respective generation reliability criteria. 650. The first Requirement specifies
actually use CBM, such as load serving iii. Comments five items that the regional reliability
entities. organization must include and explain
645. The Commission received no in its TRM calculation method. In
comments regarding MOD–007–0. addition, the Reliability Standard allows
to the technical expertise of the ERO
and with the expectation that the iv. Commission Proposal other items specific to a regional
Reliability Standard will accomplish the 646. The Commission proposes to reliability organization to be explained
purpose represented to the Commission approve MOD–007–0 as mandatory and along with their use in determining
by the ERO and that it will improve the enforceable. In addition, we propose to TRM values, if such items exist. Some
reliability of the nation’s Bulk-Power direct that NERC develop modifications of these items require the regional
System, the Commission proposes to to the Reliability Standard, as discussed reliability organization to specify TRM
approve Reliability Standard MOD– below. update frequency, describe how TRM
006–0 as mandatory and enforceable. In 647. Requirement R1 of MOD–007–0 values are accounted for in ATC
addition, pursuant to section 215(d)(5) provides that the use of CBM by the calculations, and detail which
of the FPA and § 39.5(f) of our load-serving entity shall be uncertainties are accounted for in TRM.
regulations, we propose directing that documented. However, the applicability The regional reliability organization
NERC submit a modification to MOD– section of MOD–007–0 applies to only must also describe how transmission
006–0 that: (1) Includes a provision that transmission service providers and not capacity preserved for TRM can be sold
will ensure that CBM and TRM are not load-serving entities. The Commission for non-firm services.
used for the same purpose; (2) modifies believes that the applicability section ii. Staff Preliminary Assessment
Requirement R1.2 so that concurrent should be expanded to include the
occurrence of generation deficiency and entities that actually use CBM, such as 651. Staff noted that although MOD–
transmission constraints is not a load-serving entities. 008–0 requires each regional reliability
required condition for CBM usage; (3) 648. Accordingly, giving due weight organization to develop and document a
modifies Requirement R1.2 to define to the technical expertise of the ERO Regional TRM methodology, it does not
‘‘generation deficiency’’ based on a and with the expectation that the specify how TRM is determined and
specific energy emergency alert level; Reliability Standard will accomplish the allocated across transmission paths.
and (4) expands the applicability purpose represented to the Commission Staff also stated that the Requirement
section to include the entities that by the ERO and that it will improve the R1.5 does not specify the criteria for
actually use CBM, such as load serving reliability of the nation’s Bulk-Power granting variances from the regional
entities. System, the Commission proposes to TRM methodology.
h. Documentation of the Use of Capacity approve Reliability Standard MOD– iii. Comments
Benefit Margin (MOD–007–0) 007–0 as mandatory and enforceable. In
652. NERC points out that a
i. NERC Proposal Reliability Standard is under
development that will make various
643. NERC states that the purpose of regulations, we propose directing that
components of the methodology
MOD–007–0 is to promote the NERC to submit a modification to
mandatory to ensure consistency.
consistent use of transmission transfer MOD–007–0 that expands the 653. MRO advocates that MOD–008–
capability margin calculations among applicability section to include the 0 should specify the criteria for granting
transmission system users. MOD–007–0 entities that actually use CBM, such as variances.
requires transmission service providers load-serving entities.
that use CBM to report and post its use. iv. Commission Proposal
i. Documentation and Content of Each
This Reliability Standard has two Regional Transmission Reliability 654. MOD–008–0 is a ‘‘fill-in-the-
Requirements. The first Requirement Margin Methodology (MOD–008–0) blank’’ Reliability Standard that requires
calls for each transmission provider that each regional reliability organization to
uses CBM, at the request of a load- i. NERC Proposal develop a methodology for determining
serving entity, to report that use to the 649. NERC notes that the purpose of TRM and to make the methodology
regional reliability organization, NERC MOD–008–0 is to promote the available to others for review. Because
and the transmission users. The consistent application of transmission the regional methodologies have not
transmission service provider is not transfer capability margin calculations been submitted to the Commission, it is
not possible to determine at this time ii. Staff Preliminary Assessment resource plans, as well as one of the
whether MOD–008–0 satisfies the 658. Staff noted that MOD–009–0 entities responsible for the integrity and
statutory requirement that a proposed does not provide a consistent procedure consistency of the data.
Reliability Standard be ‘‘just, for review of TRM calculations and the iii. Comments
reasonable, not unduly discriminatory resulting values.
or preferential, and in the public 663. MRO and ReliabilityFirst state
interest.’’ Accordingly, the Commission iii. Comments that they generally agree with staff’s
will not propose to accept or remand evaluation of MOD–010–0. However, in
659. The Commission received no
this Reliability Standard until the ERO response to the staff comment regarding
specific comments regarding MOD–009–
submits additional information. In the inappropriate exclusion of the planning
0.
authority from the Reliability Standard’s
interim, compliance with MOD–008–0
iv. Commission Proposal applicability, ReliabilityFirst points out
should continue on its current basis,
660. MOD–009–0 is a ‘‘fill-in-the- that the information required by the
and the Commission considers
blank’’ Reliability Standard that requires Reliability Standard originates with the
compliance with the Reliability transmission planner and resource
Standard to be a matter of good utility each regional reliability organization to
develop its procedure for review of TRM planner who, ultimately, provide such
practice. information to the planning authority.
calculations and the resulting values.
655. Although we do not propose any Similarly, PG&E states that a planning
Because the regional procedures have
action with regard to MOD–008–0 at not been submitted to the Commission, authority does not develop, and cannot
this time, we address our concerns it is not possible to determine at this provide such information and is rightly
regarding this Reliability Standard time whether MOD–009–0 satisfies the not included in the applicability section
below. statutory requirement that a proposed of the standard. PG&E explains that
656. We are concerned about the lack Reliability Standard be ‘‘just, MOD–010–0 requires transmission
of clear requirements on how TRM reasonable, not unduly discriminatory owners, transmission planners,
should be calculated and allocated or preferential, and in the public generator owners, and resource planners
across the paths. In addition, the lack of interest.’’ Accordingly, the Commission to provide appropriate equipment
consistent criteria and clarity with will not propose to accept or remand characteristics, system data, and
regard to the entity on whose behalf this Reliability Standard until the ERO existing and future interchange
TRM has been set aside may result in submits additional information. In the schedules in compliance with
interim, compliance with MOD–009–0 Interconnection regional steady-state or
the transmission provider setting aside
should continue on its current basis, dynamic modeling and simulation data
excess capacity, thus increasing costs
and the Commission considers requirements and reporting procedures.
for native load customers, and blocking
third party uses of the transmission compliance with the Reliability iv. Commission Proposal
system. We seek comments on how Standard to be a matter of good utility 664. The Commission proposes to
TRM is currently calculated and practice. approve MOD–010–0 as mandatory and
allocated across the paths, and what k. Steady-State Data for Modeling and enforceable. In addition, we propose to
would be a recommended approach for Simulation of Interconnected direct that NERC develop modifications
the future. Transmission System (MOD–010–0) to the Reliability Standard, as discussed
j. Procedure for Verifying Transmission below.
i. NERC Proposal 665. We propose that MOD–010–0
Reliability Margin Values (MOD–009–0)
661. The purpose of this Reliability should add a new requirement to have
i. NERC Proposal Standard is to establish consistent data the transmission owners also provide
requirements, reporting procedures, and the list of the contingencies they use in
657. MOD–009–0 specifies the system models to be used in the performing system operation and
Requirements for establishing a reliability analysis. MOD–010–0 planning studies. We believe that access
procedure for periodic review of a requires the transmission owner, to such information will enable
transmission provider’s adherence to transmission planner, generator owner, neighboring systems to accurately study
the relevant regional reliability and resource planner to provide steady- their effects on their own systems.
organization’s TRM methodology. This state data, such as equipment 666. In addition, we propose that the
Reliability Standard has three characteristics, system data, and Reliability Standard should be modified
Requirements. The first Requirement existing and future interchange to apply to the planning authority. The
calls for each regional reliability schedules, to the regional reliability planning authority is the entity
organization to develop and implement organization, NERC, and entities responsible for coordination and
a procedure to review TRM calculations specified in Requirement R1 of MOD– integration of transmission facilities and
and the resulting values determined by 011–0. Data is to be provided within the resource plans, as well as one of the
member transmission providers to determined time schedule or upon entities responsible for the integrity and
ensure compliance with the regional request if no time schedule exists. consistency of the data. We disagree
TRM methodology. The second with commenters that the planning
Requirement is that the regional ii. Staff Preliminary Assessment authority should be omitted from the
reliability organization documents its 662. Staff noted that MOD–010–0 applicability section because it merely
TRM review procedure and makes that does not include the planning authority gets the data from the others. We believe
available to NERC on request within 30 as an applicable entity. The inclusion of that the planning authority plays a
calendar days. The third Requirement the planning authority is necessary in significant role in integration of the
specifies that the reliability regional the applicability section of the data.
organization must make the Reliability Standard because the 667. Accordingly, giving due weight
documentation of the results of the most planning authority is the entity to the technical expertise of the ERO
current TRM review available to NERC responsible for the coordination and and with the expectation that the
on request, within 30 calendar days. integration of transmission facilities and Reliability Standard will accomplish the
purpose represented to the Commission iv. Commission Proposal iii. Comments

by the ERO and that it will improve the 675. MRO agrees with staff that the
reliability of the nation’s Bulk-Power 671. As mentioned above, MOD–011–
0 is a ‘‘fill-in-the-blank’’ standard that planning authority should be included
System, the Commission proposes to in MOD–012–0. In contrast, PG&E
approve Reliability Standard MOD– requires the regional reliability
comments that MOD–012–0 does not
010–0 as mandatory and enforceable. In organizations within an Interconnection
need to be modified, as found by staff’s
addition, pursuant to section 215(d)(5) to develop comprehensive steady-state
evaluation. Since the appropriate
of the FPA and § 39.5(f) of our data requirements and reporting
planning authority is already a part of
regulations, we propose to direct that procedures needed to model and
the regional reliability organization,
NERC to submit a modification to analyze the steady-state conditions for
specific inclusion of the planning
MOD–010–0 that: (1) Adds a new each of the three NERC
authority within the Reliability
requirement for transmission owners to Interconnections. Because the regional
Standard is unnecessary. PG&E explains
provide the list of contingencies they methodologies have not been submitted
that, because MOD–012–0 requires the
use in performing system operation and to the Commission, it is not possible to
regional reliability organization within
planning studies; and (2) expands the determine at this time whether MOD–
an Interconnection to develop data
applicability section to include the 011–0 satisfies the statutory requirement
requirements and reporting procedures
planning authority. that a proposed Reliability Standard be
needed to model and analyze the
‘‘just, reasonable, not unduly
l. Maintenance and Distribution of conditions for each Interconnection, it
Steady-State Data Requirements and already provides for appropriate
the public interest.’’ Accordingly, the
Reporting Procedures (MOD–011–0) participation by the planning authority.
Commission will not propose to accept
i. NERC Proposal or remand this Reliability Standard iv. Commission Proposal
until the ERO submits additional 676. We propose that MOD–012–0
668. The purpose of MOD–011–0 is to information. In the interim, compliance add a new requirement for transmission
establish consistent data requirements, with MOD–011–0 should continue on owners to provide the list of faults or
reporting procedures, and system its current basis, and the Commission disturbances they use in performing
models to be used in the reliability considers compliance with the dynamic stability analysis. We believe
analysis. MOD–011–0 requires the Reliability Standard to be a matter of that access to such information will
regional reliability organization within good utility practice. enable neighboring systems to
an Interconnection to develop 672. As we noted in the discussion of accurately study their effects on their
comprehensive steady-state data MOD–010–0, we believe that the own systems. As we noted in the
requirements and reporting procedures planning authority plays a significant discussions of MOD–010–0 and MOD–
needed to model and analyze the role in integration of data and should 11–0, we believe that the planning
steady-state conditions for each of the also be included in the applicability authority plays a significant role in
three NERC Interconnections. The section of MOD–011–0. integration of data and should also be
regional reliability organizations within included in the applicability section of
an Interconnection are required to: m. Dynamics Data for Modeling and MOD–012–0.
(1) Document their Interconnection’s Simulation of the Interconnected 677. Accordingly, giving due weight
data requirements and reporting Transmission System (MOD–012–0) to the technical expertise of the ERO
procedures; i. NERC Proposal and with the expectation that the
(2) Review the data requirements and Reliability Standard will accomplish the
673. The purpose of MOD–012–0 is to purpose represented to the Commission
reporting procedures at least every five
establish consistent data requirements, by the ERO and that it will improve the
years; and
reporting procedures, and system reliability of the nation’s Bulk-Power
(3) Make the data requirements and models to be used in the reliability System, the Commission proposes to
reporting procedures available on analysis. MOD–012–0 requires approve Reliability Standard MOD–
request to the regional reliability transmission owners, transmission 012–0 as mandatory and enforceable. In
organizations, NERC, and all users of planners, generator owners, and addition, pursuant to section 215(d)(5)
the interconnected transmission system. resource planners to provide dynamic of the FPA and § 39.5(f) of our
ii. Staff Preliminary Assessment system modeling and simulation data, regulations, we propose directing that
such as equipment characteristics and NERC submit a modification to MOD–
669. Staff noted that MOD–011–0, system data, to the regional reliability 012–0 that: (1) adds a new requirement
identified as a ‘‘fill-in-the-blank’’ organization, NERC, and entities for transmission owners to provide the
standard, does not include the planning specified in MOD–013–0, Requirement list of faults or disturbances they use in
authority in the Requirements section. R1, within a pre-determined time performing dynamic stability analysis;
The planning authority is the entity schedule or upon request if no time and (2) expands the applicability
responsible for coordination and schedule exists. section to include the planning
integration of transmission facilities and authority.
resource plans, as well as one of the
entities responsible for the integrity and n. Maintenance and Distribution of
674. Staff stated that proposed Dynamics Data Requirements and
consistency of the data. Reliability Standard MOD–012–0 does Reporting Procedures (MOD–013–1)
iii. Comments not apply to the planning authority.
However, the planning authority is the i. NERC Proposal

670. PG&E comments that MOD–011– entity responsible for the coordination 678. The purpose of MOD–013–1 is to
0 does not need to be modified because and integration of transmission facilities establish consistent data requirements,
the appropriate planning authority will and resource plans, as well as one of the reporting procedures, and system
be a part of the regional reliability entities responsible for the integrity and models to be used in reliability analysis.
organization. consistency of the data. MOD–013–1 requires the regional
reliability organizations within an responsibilities under the Reliability data if they are unable to obtain unit
Interconnection to develop Standard and the applicability section specific data for any reason.
comprehensive dynamics data should be revised to reflect that. PG&E, 686. We agree with NERC that the
requirements and reporting procedures on the other hand, asserts that the Reliability Standard should apply to the
needed to model and analyze the proposed Reliability Standard does not planning authority.
dynamic behavior and response of each need to be modified, because the o. Development of Steady-State System
of the three NERC Interconnections. appropriate planning authority is a part Models (MOD–014–0)
More specifically, the regional of the regional reliability organization,
reliability organization, in coordination specific inclusion of the planning i. NERC Proposal
with its transmission owners, authority within the Reliability 687. The purpose of MOD–014–0 is to
transmission planners, generator Standard is unnecessary. establish consistent data requirements,
owners, and resource planners within 683. PG&E adds that Requirement reporting procedures, and steady-state
an Interconnection, is required to: (1) R1.1.1, which allows for the use of system models to be used in reliability
Participate in development of estimated or typical manufacturer’s data analysis. The Reliability Standard
documentation for their Interconnection on pre-1990 units to model dynamic requires the regional reliability
data requirements and reporting behavior when unit-specific data is organizations within each
procedures; (2) participate in the review unavailable, is arbitrary in imposing the Interconnection to coordinate and
of those data requirements and reporting 1990 cut-off. PG&E asserts that difficulty jointly develop and maintain a library of
procedures (at least every five years); in obtaining unit specific data is not solved Interconnection-specific steady-
and (3) make the data requirements and limited to the age of the unit but also state models. These models are to
reporting procedures available on unit configuration. As a result, PG&E include near- and long-term planning
request to the regional reliability recommends that the 1990 cut-off be horizons representing system conditions
organizations, NERC, and all users of removed from the proposed Reliability for various demand levels. The yearly
the interconnected transmission system Standard and that the Reliability models represent various seasonal
on request. Standard be revised to allow the use of conditions, usually for on- and off-peak
679. The proposed Reliability estimated or typical manufacturer data load. The models are to be updated
Standard specifies the types of dynamic where unit specific data is impractical annually. The regional reliability
data that should be included. For to obtain. organizations are required to submit the
example, it specifies that dynamics data most recent models to NERC in
pertaining to generating units, accordance with a set schedule.
synchronous condensers, other devices 684. MOD–013–1 is a ‘‘fill-in-the-
that dynamically respond during blank’’ Reliability Standard that requires ii. Staff Preliminary Assessment
disturbances, and dynamics data the regional reliability organizations 688. Staff pointed out that while the
representing load characteristics should within an Interconnection to develop Reliability Standard requires the
be provided. In addition, the Reliability comprehensive dynamics data development of steady-state models, it
Standard requires that dynamics data be requirements and reporting procedures does not require periodic verification or
consistent with the steady state data needed to model and analyze the appropriate modification of models
supplied according to MOD–010–0, dynamic behavior or response for each against field data in accordance with
Requirement R1. of the three NERC Interconnections. Recommendation No. 24 of the Blackout
680. NERC’s August 28, 2006 Because the regional methodologies Report.257
Supplemental Filing includes a revised have not been submitted to the
version of MOD–013, designated MOD– Commission, it is not possible to iii. Comments
013–1. MOD–013–1 has an additional determine at this time whether the 689. NERC comments that the NERC
Requirement to provide design data for proposed Reliability Standard satisfies Multiregional Modeling Working Group
the new or refurbished excitation the statutory requirement that it be (MMWG) is following recommendations
systems. ‘‘just, reasonable, not unduly from the Blackout Report that involve
discriminatory or preferential, and in verifying powerflow models and
ii. Staff Preliminary Assessment the public interest.’’ Accordingly, the databases, which include benchmarking
681. Staff stated that proposed Commission will not propose to accept to actual load levels and the periodic
Reliability Standard does not include or remand this Reliability Standard testing of MW, MVAR, and dynamic
the planning authority in the until the ERO submits additional controls of generators.
applicability section. The inclusion of information. In the interim, compliance 690. MRO, National Grid and ISO/
the planning authority is necessary in with the proposed Reliability Standard RTO Council agree with staff’s
the applicability section of the should continue, and the Commission evaluation of MOD–014–0.
Reliability Standard because the considers compliance with the ReliabilityFirst submits that it generally
planning authority is the entity Reliability Standard to be a matter of agrees with staff’s evaluation of MOD–
responsible for coordinating and good utility practice. Although we do 014–0 that, to ensure consistency,
integrating transmission facilities and not propose any action with regard to procedures developed by the individual
resource plans, as well as one of the MOD–013–1 at this time, we address regions need to be merged. In contrast,
entities responsible for the integrity and our concerns regarding this Reliability CenterPoint maintains that it is
consistency of the data.256 Standard below. impractical to require each region to use
iii. Comments 685. We share PG&E’s concern identical practices in building and
regarding the 1990 cut off date that the validating its models.
682. NERC acknowledges that difficulty in obtaining unit-specific data

planning authorities also have is not limited to the age, but may also iv. Commission Proposal
256 Although the Staff Preliminary Assessment
be due to other factors such as unit 691. MOD–014–0 is a ‘‘fill-in-the-
addresses concerns regarding the MOD–013–0,
configuration. The Commission seeks blank’’ Reliability Standard that requires
many of the same concerns apply to MOD–013–1 comment whether it is reasonable to
as well. permit entities to estimate dynamics 257 Blackout Report at 160.
the regional reliability organizations requirements under FERC Form 715 and this Reliability Standard until the ERO
within an Interconnection to develop, MOD–014–0. submits additional information. In the
coordinate and maintain a library of interim, compliance with MOD–015–0
p. Development of Dynamics System
solved Interconnection-specific steady- should continue on a voluntary basis,
Models (MOD–015–0)
state models. Because the regional and the Commission considers
procedures have not been submitted to i. NERC Proposal compliance with the Reliability
the Commission, it is not possible to 695. The purpose of MOD–015–0 is to Standard to be a matter of good utility
determine at this time whether MOD– establish consistent data requirements, practice.
014–0 satisfies the statutory requirement reporting procedures, and system 700. Although we do not propose any
that a proposed Reliability Standard be models to be used in the reliability action with regard to MOD–015–0 at
‘‘just, reasonable, not unduly analysis. The Reliability Standard this time, we address our concerns
discriminatory or preferential, and in requires the regional reliability regarding this Reliability Standard
the public interest.’’ Accordingly, the organizations within each below.
Interconnection to coordinate and 701. We agree with NERC and believe
jointly develop and maintain a library of that a Requirement to verify accuracy of
or remand this Reliability Standard system dynamics models should be a
until the ERO submits additional initialized (with no faults and
disturbances) Interconnection-specific part of this Reliability Standard.261
information. In the interim, compliance
with MOD–014–0 should continue, and dynamic system models. These models q. Documentation of Data Reporting
the Commission considers compliance represent near-term years and the years Requirements for Actual and Forecast
with the Reliability Standard to be a chosen from the longer-term planning Demands, Net Energy for Load,
matter of good utility practice. horizon. The models are to be updated Controllable Demand—Side
annually. The regional reliability Management (MOD–016–1)
692. Although we do not propose any organizations are required to submit the
action with regard to MOD–014–0 at i. NERC Proposal
most recent models to NERC in
this time, we address our concerns accordance with a set schedule. 702. The purpose of MOD–016–1 is to
regarding this Reliability Standard ensure that past and forecasted demand
below. ii. Staff Preliminary Assessment data are available for validation of past
693. The Reliability Standard does not 696. Staff noted that, while the events and future system assessments.
require periodic verification or Reliability Standard requires the MOD–016–1 requires the planning
appropriate modification of models development of dynamic models, it does authority and the regional reliability
against field data in accordance with not require periodic verification or organization to have documentation
Recommendation No. 24 of the Blackout appropriate modification of models identifying the scope and details of the
Report.258 We understand that the NERC against field data in accordance with actual and forecast demand and load
Recommendation No. 24 of the Blackout data, and controllable Demand-Side
MMWG that is incorporating
Report.260 Management (DSM) data to be reported
recommendations from the Blackout
for system modeling and reliability
Report is developing models only for iii. Comments
analysis. These requirements are to
the Eastern Interconnection. We believe 697. NERC comments that testing ensure that consistent data is supplied
that a Requirement to verify that steady should be done to periodically verify for various TPL and MOD Reliability
state models are accurate should be a that system dynamics models are Standards that address system models
part of this Reliability Standard so that accurate. and simulations.262
it applies to all three Interconnections. 698. ISO/RTO Council and MRO agree
694. In addition, we are concerned with staff’s evaluation of Reliability ii. Staff Preliminary Assessment
about creating a duplicate effort if both Standard MOD–015–0. MRO suggests 703. Staff noted that the proposed
the transmission owner and the regional that, should a Regional Entity be Reliability Standard does not include
reliability organization separately required to perform this responsibility, the transmission planner in the
develop the steady-state base cases it should be required in the Regional applicability section. The transmission
required for the FERC Form 715 filing Entity’s delegation agreement. planner is one of the entities involved
and for MOD–014–0. We believe that iv. Commission Proposal in assuring the integrity and consistency
this Reliability Standard should contain of the load, energy, and DSM data.
a Requirement specifying the time 699. MOD–015–0 is a ‘‘fill-in-the-
blank’’ Reliability Standard that requires iii. Comments
period and the planning years to be
identical to those found in FERC Form the regional reliability organizations 704. The Commission received no
715.259 We also seek comments on any within an Interconnection to develop, specific comments regarding this
coordinate and maintain a library of Reliability Standard.
incompatibility between our
initialized Interconnection-specific
dynamics system models. Because the iv. Commission Proposal
258 Blackout Report at 160.
259 FERC Form 715 is available at http://
applicable regional procedures have not 705. We propose that the Reliability
www.ferc.gov/docs-filing/eforms.asp#715. FERC been submitted to the Commission, it is Standard be modified to include
Form 715 specific instructions on Part 2, power not possible to determine at this time
flow base cases: whether MOD–015–0 satisfies the 261 See ERCOT report ‘‘August 19, 2004 Forney
‘‘The input data to the solved power flow base Plant Trip Event Simulation’’ prepared by the
statutory requirement that a proposed ERCOT Reliability and Operations Subcommittee
cases must be forward-looking. For example, the
Reliability Standard be ‘‘just,
power flow base cases submitted and made by ERCOT Dynamics Working Group.
available might include: 1. One, two, five and ten- reasonable, not unduly discriminatory 262 On August 28, 2006, NERC submitted MOD–
year forecasts under summer and winter peak or preferential, and in the public 016–1 for approval, which replaces MOD–016–0.
conditions and 2. A one-year forecast under light interest.’’ Accordingly, the Commission MOD–016–1 contains an additional Requirement
load/heavy transfers condition. This example is that each load-serving entity must count its
similar to a schedule of base cases proposed by will not propose to accept or remand customer demand values only once. MOD–016–1
NERC’s Multiregional Modeling Working Group for has also an improved set of Measures and Levels
development at the time this form was created.’’ 260 Blackout Report at 160. of Non-compliance.
transmission planner in the some of the data related to the for: (1) reporting of temperature and
applicability section because the Reliability Standard are already humidity along with the peak load; and
transmission planner is one of the addressed in U.S. Energy Information (2) reporting of the accuracy, error, and
entities involved in assuring the Administration (EIA) reporting bias of load forecasts compared to actual
integrity and consistency of the load, requirements. loads with due regard to temperature
energy, and DSM data.263 and humidity variations.
706. Accordingly, giving due weight iv. Commission Proposal
to the technical expertise of the ERO 710. The Commission proposes to s. Treatment of Nonmember Demand
and with the expectation that the approve MOD–017–0 as mandatory and Data and How Uncertainties Are
Reliability Standard will accomplish the enforceable. In addition, we propose to Addressed in the Forecasts of Demand
purpose represented to the Commission direct that NERC develop modifications and Energy for Load (MOD–018–0)
by the ERO and that it will improve the to the Reliability Standard, as discussed i. NERC Proposal
reliability of the nation’s Bulk-Power below. 715. The purpose of MOD–018–0 is to
System, the Commission proposes to 711. The Commission notes that load ensure that past and forecasted demand
approve Reliability Standard MOD– forecasts for most of the nation are data are available for validation of past
016–1 as mandatory and enforceable. In driven by hot and humid weather. Most events and future system assessment.
addition, pursuant to section 215(d)(5) forecasts are ‘‘normalized’’ to a standard The Reliability Standard requires that
of the FPA and § 39.5(f) of our temperature and humidity condition to the load-serving entities, planning
regulations, we propose directing that avoid the variations caused by real authorities, transmission planners, and
NERC submit a modification to MOD– weather conditions. It is important to resource planners each submit a load
016–1 that expands the applicability know these conditions when viewing data report which: (1) Indicates whether
section to include the transmission the actual peak loads and in predicting the demand data includes the regional
planner. what peak loads will be in the future. reliability organization non-members’
The Commission proposes to add a demand, and (2) addresses how
r. Aggregated Actual and Forecast
Requirement to provide temperature assumptions, methods, and
Demands and Net Energy for Load
and humidity information that is uncertainties are treated. The Reliability
(MOD–017–0)
associated with peak load data. Standard also requires that each of the
i. NERC Proposal 712. MOD–017–0 does not require a load-serving entities, planning
707. The purpose of MOD–017–0 is to consistent methodology in validating authorities, transmission planners, and
ensure that past and forecasted demand and forecasting demand, specifically in resource planners report the above
data are available for validation of past reporting the accuracy, error, and bias of information to NERC, the regional
events and future system assessment. load forecasts by load serving entity, reliability organization, and the load-
The Reliability Standard requires the planning authority, and resource serving entities, planning authorities,
load-serving entities, planning planner. This can lead to transmission planners, and resource
authorities and resource planners to inconsistencies in modeling the load planners on request.
annually provide aggregated data for transmission planning and ATC
information on: (1) Integrated hourly analysis. We believe that ii. Staff Preliminary Assessment
demands; (2) actual monthly and annual underestimated load data (modeled in 716. Staff raised no specific concerns
peak demand (MW) and net load energy steady-state cases for future years) may regarding MOD–018–0.
(GWh) for the prior year; (3) monthly not adequately indicate a need for
operating procedures, or system iii. Comments
peak demand forecast and net load
energy for the next two years; and (4) reinforcements, and can potentially 717. The Commission received no
annual peak demand forecast (summer jeopardize system reliability. specific comments regarding
and winter) and annual net load energy 713. We propose that the Reliability MOD–018–0.
for at least five and up to ten years into Standard have additional requirements
for reporting the accuracy, error, and iv. Commission Proposal
the future.
bias of load forecasts compared to actual 718. The Commission proposes to
ii. Staff Preliminary Assessment loads with due regard to temperature approve MOD–018–0 as mandatory and
708. Staff stated that MOD–017–0 and humidity variations.264 enforceable. The Requirements set forth
does not require a consistent 714. Accordingly, giving due weight in MOD–018–0 are sufficiently clear and
methodology in validating and to the technical expertise of the ERO objective as to provide guidance for
forecasting demand. Specifically, there and with the expectation that the compliance.
are no Requirements to report the Reliability Standard will accomplish the
t. Reporting of Interruptible Demands
accuracy, error, and bias of load purpose represented to the Commission
and Direct Control Load Management
forecasts. by the ERO and that it will improve the
(MOD–019–0)
reliability of the nation’s Bulk-Power
iii. Comments System, the Commission proposes to i. NERC Proposal
709. ReliabilityFirst submits that it approve Reliability Standard MOD– 719. The purpose of MOD–019–0 is to
generally agrees with staff’s evaluation 017–0 as mandatory and enforceable. In ensure that past and forecasted demand
of MOD–017–0. It also points out that addition, pursuant to section 215(d)(5) data are available for validation of past
of the FPA and § 39.5(f) of our events and future system assessment.
263 DSM may include control of electric supply to
regulations, we propose to direct that The Reliability Standard requires that
individual appliances or equipment on customer NERC submit a modification to MOD–

premises, interruptible/curtailable load, demand the load-serving entities, planning
bidding/buy-back programs, emergency demand 017–0 that includes new Requirements authorities, transmission planners, and
response programs, capacity market programs, resource planners annually provide
ancillary service market programs, and distributed 264 The Commission expects that the data
generation (including solar PV, Combined Heat and provided in response to MOD–017–0 will be
their forecasts of interruptible demands
Power facilities, and micro turbines). See Demand consistent with data reported in MOD–019–0, and direct control load management to
Response Report, Executive Summary at viii. MOD–020–0 and MOD–021–0. NERC, the regional reliability
organization, and other entities as authorities, and reliability coordinators Management measures are addressed in
specified in MOD–016–1, Requirement on request. the forecasts of its peak demand and
R1. The data should contain the annual net energy for load in the data
forecasts for at least five years, and up reporting procedures of MOD–016–0,
to ten years. 725. Staff found that proposed Requirement R1. Lastly, MOD–021–0
Reliability Standard MOD–020–0 does requires load-serving entities,
ii. Staff Preliminary Assessment not require a consistent methodology in transmission planners, and resource
720. Staff stated that proposed validating and forecasting interruptible planners to each document the
Reliability Standard MOD–019–0 does demand. Specifically, there are no treatment of its DSM programs, which is
not require a consistent methodology to Requirements to report the accuracy, to be made available to NERC on
validate and forecast interruptible error and bias of load forecasts. request.
demand. Specifically, there are no iii. Comments
Requirements to report the accuracy, ii. Staff Preliminary Assessment
error and bias of load forecasts. 726. The Commission received no 731. Staff stated that proposed
specific comments regarding Reliability Standard MOD–021–0 does
iii. Comments MOD–020–0. not require a consistent methodology in
721. The Commission received no iv. Commission Proposal validating and forecasting demand.
specific comments regarding Specifically, there are no Requirements
MOD–019–0. 727. The Commission proposes to to report the accuracy, error and bias of
approve MOD–020–0 as mandatory and
load forecasts.
iv. Commission Proposal enforceable. In addition, we propose to
722. MOD–019–0 does not require direct that NERC develop modifications iii. Comments
reporting of the accuracy, error and bias to the Reliability Standard, as discussed 732. The Commission received no
of controllable load 265 forecast. below. specific comments regarding
Therefore, we propose that NERC 728. For the same reasons as MOD–021–0.
develop a Requirement for a consistent discussed in MOD–017, the Commission
proposes to direct NERC to add iv. Commission Proposal
approach to controllable load forecast
requirements concerning the reporting 733. The Commission proposes to
and verification as well as reporting of
of the accuracy, error, and bias of approve MOD–021–0 as mandatory and
the associated accuracy, error and bias
controllable load forecasts. enforceable. In addition, we propose to
of controllable load forecast. 729. Accordingly, giving due weight
723. Accordingly, giving due weight direct that NERC develop modifications
to the technical expertise of the ERO to the Reliability Standard, as discussed
to the technical expertise of the ERO and with the expectation that the
and with the expectation that the below.
Reliability Standard will accomplish the 734. MOD–021–0 does not require a
Reliability Standard will accomplish the purpose represented to the Commission
purpose represented to the Commission consistent methodology in validating
by the ERO and that it will improve the and forecasting demand, specifically in
by the ERO and that it will improve the reliability of the nation’s Bulk-Power
reliability of the nation’s Bulk-Power reporting information detailing how
System, the Commission proposes to DSM measures are addressed in the
System, the Commission proposes to approve Reliability Standard MOD–
approve Reliability Standard MOD– forecasts. We propose that NERC modify
019–0 as mandatory and enforceable. In MOD–021–0 to contain Requirements
019–0 as mandatory and enforceable. In addition, pursuant to section 215(d)(5)
addition, pursuant to section 215(d)(5) standardizing principles on reporting
of the FPA and § 39.5(f) of our and validation of DSM program
of the FPA and § 39.5(f) of our regulations, we propose directing that
regulations, we propose to direct that information. While the title of this
NERC submit a modification to MOD– Reliability Standard includes
NERC submit a modification to MOD– 020–0 that includes a new requirement
019–0 that includes new Requirements ‘‘controllable demand side
concerning the reporting of the management,’’ the Requirements only
for reporting of the accuracy, error and accuracy, error, and bias of controllable
bias of controllable load forecast. relate to demand side management in
load forecasts. general. We have a similar concern with
u. Providing Interruptible Demands and v. Documentation of the Accounting the purpose statement of this Reliability
Direct Control Load Management Data Methodology for the Effects of Standard. Thus, we propose that the
to System Operators and Reliability Controllable Demand-Side Management ERO modify the title and purpose
Coordinators (MOD–020–0) in Demand and Energy Forecasts (MOD– statement consistent with the
i. NERC Proposal 021–0) Requirements.
724. The purpose of MOD–020–0 is to i. NERC Proposal to the technical expertise of the ERO
ensure that past and forecasted demand 730. The purpose of MOD–021–0 is to and with the expectation that the
data are available for validation of past ensure that past and forecasted demand Reliability Standard will accomplish the
events and future system assessment. data are available for validation of past purpose represented to the Commission
The Reliability Standard requires that events and future system assessment. by the ERO and that it will improve the
each load-serving entity, planning The Reliability Standard requires the reliability of the nation’s Bulk-Power
authority, transmission planner, and load-serving entities, transmission System, the Commission proposes to
resource planner identifies its amount planners, and resource planners to approve Reliability Standard MOD–
of: (1) Interruptible demand and (2) clearly document how each addresses 019–0 as mandatory and enforceable. In
direct control load management (DCLM) the demand and energy effects of DSM addition, pursuant to section 215(d)(5)
to the transmission operators, balancing programs . The Reliability Standard also of the FPA and § 39.5(f) of our
265 Whereas MOD–019–0 and MOD–020–0 use
requires the load-serving entities, regulations, we propose directing that
two separate terms interruptible load and Direct
transmission planners, and resource NERC submit a modification to MOD–
Control Load Management, NOPR uses planners to each include information 021–0 that: (1) Includes a Requirement
‘‘controllable load’’ to refer to both of them. detailing how Demand-Side standardizing principles on reporting
and validation of DSM program it is not possible to determine at this reliability organization’s procedures for
information; and (2) modifies the title time whether MOD–024–1 satisfies the verifying and reporting its gross and net
and purpose statement to remove the statutory requirement that a proposed reactive power generating capability.
word ‘‘controllable,’’ consistent with the Reliability Standard be ‘‘just,
Requirements. reasonable, not unduly discriminatory
or preferential, and in the public 743. Staff identified MOD–025–1 as a
w. Verification of Generator Gross and ‘‘fill-in-the-blank’’ standard that applies
Net Real Power Capability (MOD–024– interest.’’ Accordingly, the Commission
will not propose to accept or remand to the regional reliability organization.
1)
this Reliability Standard until the ERO iii. Comments
i. NERC Proposal submits additional information. In the
interim, compliance with MOD–24–1 744. CenterPoint suggests that MOD–
should continue on its current basis, 025–1 does not adequately address the
MOD–024–1 is to ensure that accurate
and the Commission considers verification of generator reactive
information on generation gross and net
compliance with the Reliability capability. It explains that the
real power capability is used for
Standard to be a matter of good utility Reliability Standard requires a generator
reliability assessment. The Reliability
practice. to provide certain reactive power
Standard requires the regional reliability
organization to establish and maintain 740. Although we do not propose any capability at the unit’s full MW loading.
procedures to address verification of action with regard to MOD–024–1 at However, it points out that most units
generator gross and net real power this time, we address our concerns rarely operate at full MW loading,
capability. The Reliability Standard also regarding this Reliability Standard making it unclear what reactive
requires the regional reliability below. capability is required over a unit’s real
organization to provide its generator 741. We believe that the Reliability power (MW) operating range.
gross and net real power capability Standard is not sufficiently clear CenterPoint suggests that MOD–025–1
verification and reporting procedures, because it does not define the test would be clearer if it requires a
and any changes to those procedures, to conditions and methodologies for minimum reactive (MVAR) capability
the generation owners, generation calculating de-rating factors. Such throughout a unit’s real power operating
operators, transmission operators, specificity would provide consistency range.
planning authorities, and transmission in reporting of generator gross and net 745. MRO and ReliabilityFirst note
planners affected by those procedures. real power capability. In addition, we that MOD–025–1 is currently
Finally, MOD–024–1 requires the note that the Requirement R2 states that undergoing field-testing.
generator owners to follow their the ‘‘Regional Reliability Organization iv. Commission Proposal
regional reliability organization’s shall provide generator gross and net 746. The MOD–025–1 is a ‘‘fill-in-the-
procedure for verifying and reporting real power capability verification within blank’’ Reliability Standard that requires
gross and net real power generating 30 calendar days of approval.’’ It is not the regional reliability organizations to
capability. clear what approval is required and it is establish and maintain procedures to
ii. Staff Preliminary Assessment also not clear when the 30 days period address verification of generator gross
starts. Taking into account that the and net reactive power capability.
737. Staff noted that while the Reliability Standard is currently
Reliability Standard requires the Because the applicable regional
undergoing field-testing, we believe that procedures have not been submitted to
regional reliability organization to more information will be available at
establish and maintain procedures to the Commission, it is not possible to
the time the NOPR comments are due. determine at this time whether MOD–
address verification of generator gross
and net real power capability, the x. Verification of Generator Gross and 025–1 satisfies the statutory requirement
Reliability Standard does not define test Net Reactive Power Capability (MOD– that a proposed Reliability Standard be
conditions, e.g., ambient temperature, 025–1) ‘‘just, reasonable, not unduly
river water temperature, or discriminatory or preferential, and in
i. NERC Proposal
methodologies for calculating de-rating the public interest.’’ Accordingly, the
factors for conditions such as higher 742. NERC states that the purpose of Commission will not propose to accept
ambient temperatures than the test MOD–025–1 is to ensure that accurate or remand this Reliability Standard
temperature. information on generation gross and net until the ERO submits additional
reactive power capability is used for information. In the interim, compliance
iii. Comments reliability assessment. The Reliability with MOD–25–1 should continue on its
738. NERC points out that Standard requires the regional reliability current basis, and the Commission
Requirement R1.3 of MOD–024–1 organization to establish and maintain considers compliance with the
includes data verification of any procedures to address verification of Reliability Standard to be a matter of
applicable conditions under which the generator gross and net reactive power good utility practice.
data should be verified. MRO and capability. The Reliability Standard also 747. Although we do not propose any
ReliabilityFirst note that MOD–024–1 is requires the regional reliability action with regard to MOD–025–1 at
currently undergoing field-testing. organization to provide its generator this time, we address our concerns
gross and net reactive power capability regarding this Reliability Standard
iv. Commission Proposal verification and reporting procedures, below.
739. MOD–024–1 is a ‘‘fill-in-the- and any changes to those procedures, to 748. We agree with CenterPoint that
blank’’ Reliability Standard that requires the generator owners, generator MOD–025–1 could be clearer. This
the regional reliability organizations to operators, transmission operators, could be accomplished by requiring a
establish and maintain procedures to planning authorities, and transmission minimum reactive power (MVAR)
address verification of generator gross planners affected by the procedure capability throughout a unit’s real
and net real power capability. Because within 30 calendar days of approval. power operating range. In addition, we
the applicable regional procedures have Lastly, MOD–025–1 requires the note that the Requirement R2 states that
not been submitted to the Commission, generator owner to follow its regional the ‘‘Regional Reliability Organization
shall provide generator gross and net iii. Comments authority to have a training program for
real power capability verification within 752. Several commenters recommend all operating personnel who occupy
30 calendar days of approval.’’ It is not that the Commission accept the positions that either have primary
clear what approval is required and it is proposed Reliability Standard.267 responsibility, directly or indirectly, for
also not clear when the 30 days period the real-time operation of the Bulk-
starts. Taking into account that the iv. Commission Proposal Power System or who are directly
Reliability Standard is currently 753. PER–001–0 requires that each responsible for complying with the
undergoing field-testing, we believe that transmission operator and balancing NERC Reliability Standards. According
more information will be available at authority provide operating personnel to NERC’s petition, the purpose of a
the time the NOPR comments are due. with the responsibility and authority to training program is to ensure that
implement real-time actions to ensure operating personnel are capable of
9. PER: Personnel Performance, Training the stable and reliable operation of the competently performing their tasks.
and Qualifications Bulk Electric System. Documentation Requirement R3 lists the criteria that
designating the job description and must be met by the training program to
a. Overview
responsibilities and authorities of each attain that goal and Requirement R4
749. The four proposed Personnel operating position of a transmission calls for operating personnel to receive
Performance, Training and operator and balancing authority must at least five days of training in
Qualifications (PER) Reliability be articulated in ‘‘clear and emergency operations each year using
Standards are applicable to transmission unambiguous language.’’ 268 Further, the realistic simulations of system
operators, reliability coordinators and required documentation should be emergencies.
balancing authorities with the intention readily available in the control room to
all operating personnel.
of ensuring the safe and reliable 754. We believe that the proposed 758. While PER–002–0 sets out broad
operation of the interconnected grid Reliability Standard clarifies the level of objectives that a training program must
through the retention of suitably trained responsibility and authority that the satisfy, the Staff Preliminary
and qualified personnel in positions transmission operator and the balancing Assessment stated that it does not
that can impact the reliable operation of authority have to act in real-time, which specify the minimum expectations of a
the Bulk-Power System. The proposed will add to the overall reliability of the training program consistent with the
PER Reliability Standards address: (1) Bulk-Power System. We note that the roles, responsibilities and authorities of
Operating personnel responsibility and Blackout Report identified the operating and support personnel. As
authority; (2) operating personnel inadequate training of operating such, staff explained that the nature,
training; (3) operating personnel personnel as a factor that was common objective and criteria of operator
credentials; and (4) reliability to some major outages that it training programs and minimum hours
coordination staffing. reviewed.269 Further, it suggests that of training (other than a requirement of
prior blackouts could have been five days per year for realistic
b. Operating Personnel Responsibility prevented if the operators had believed simulation training) are open to
and Authority (PER–001–0) that they had the responsibility and interpretation. Staff expressed concern
i. NERC Proposal authority to act.270 that the lack of specificity in this
755. The Commission agrees with Reliability Standard will allow training
750. PER–001–0 ensures the energy NERC that this Reliability Standard programs to vary widely in their
balance and transmission reliability of should be applicable to all transmission implementation.
the Interconnected grid by requiring that operators and balancing authorities. 759. Further, staff stated that the
transmission operator and balancing How local transmission and generation proposed Reliability Standard does not
authority personnel have the control centers are incorporated into the tailor training programs according to the
responsibility and authority to direct definition of transmission operator and needs of reliability coordinators,
actions in real-time. In practical terms, generator operator is described in the balancing authorities, transmission
NERC asserts that the proposed COM Chapter of this NOPR. operators, generator operators and
Reliability Standard requires operating 756. Accordingly, the Commission
operation planning and support
proposes to approve PER–001–0 as
personnel who are responsible for personnel with differing authorities,
mandatory and enforceable. We propose
operating the Bulk-Power System to responsibilities, roles and tasks.
to find that the Reliability Standard is
have the authority to take action when Additionally, staff observed that this
just, reasonable, not unduly
they believe it is necessary.266 Reliability Standard should also apply
Additionally, PER–001–0 requires clear to reliability coordinators, generator
the public interest.
documentation that operating personnel operators, operations planning and
have the responsibility and authority to c. Operating Personnel Training (PER– operations support staff because they
implement real-time action to ensure 002–0) also play an important role in
the stable and reliable operation of the i. NERC Proposal maintaining Bulk-Power System
Bulk-Power System. reliability.
757. PER–002–0 requires that 760. Finally, the Staff Preliminary
ii. Staff Preliminary Assessment transmission operator and balancing Assessment noted that there is a widely
authority personnel are adequately accepted Systematic Approach to
751. No substantive issues were trained. Requirement R2 directs each Training (SAT) methodology that has
identified concerning PER–001–0. transmission operator and balancing been successfully used in the electric
266 Reliability Standard EOP–003–0 addresses the 267 See, e.g., NYSRC, WECC/OTS, ReliabilityFirst
industry as well as other industries.
and NERC. According to the Staff Preliminary
need to provide safeguards to shield operators from
retaliation when they declare an emergency or shed 268 PER–001–0, Measure M1. Assessment, PER–002–0 should be
load in accordance with previously approved 269 Blackout Report at 107. revised to incorporate some of the
guidelines. 270 Id. at 110. elements of the SAT methodology.
iii. Comments impact on the Interconnection, and should be separated from the
761. NERC agrees with the Staff experience and skill of its operating requirements of system operators.
Preliminary Assessment with respect to personnel. ISO/RTO Council generally 768. NYSRC recommends that the
supports a performance-based approach Commission conditionally approve
training issues, with a few minor
to training and metrics. PER–002–0, while WECC/OTS supports
clarifications. NERC states that there
765. Although several commenters approval of the proposed Reliability
must be minimum specific criteria for
support the Staff Preliminary Standard with the understanding that
training critical reliability personnel
Assessment,271 National Grid maintains NERC is currently developing a new
and training must be custom designed
that some of staff’s comments on the Reliability Standard to replace PER–
and delivered to be effective. NERC also
PER Reliability Standards are overly 002–0 with an emphasis on the SAT
agrees with staff on the need to expand
prescriptive and appear to be mandating process.
training requirements to other persons
various training tools, such as
in addition to real-time operators. iv. Commission Proposal
simulation training and SAT, without
However, NERC believes it more 769. The Commission proposes to
assessing the cost effectiveness of such
important, at this point, to focus its measures. It contends that the PER approve PER–002–0 as mandatory and
proposed training Reliability Standards Reliability Standards should focus on enforceable. In addition, we propose to
on those positions directly responsible performance measures without being direct that NERC develop modifications
for real-time operations. NERC states overly prescriptive. to the Reliability Standard, as discussed
that currently work is ongoing to 766. Along with NERC, WECC/OTS below.
develop new, substantially more robust supports expanding the applicability of 770. Inadequate operator training has
Reliability Standards for training that training programs. WECC/OTS further been identified as a common factor
address staff’s points. recommends that training requirements among past major system outages.272 In
762. EEI supports strengthening the should apply to all personnel with the the context of the task force
full range of training programs and ability to affect real-time operations of investigation of the August 2003
initiatives but believes that a one-size- the Bulk-Power System. However, it blackout, the Blackout Report stated that
fits-all approach is inappropriate. Also, believes that the training programs some reliability coordinators and
EEI states that developing strong should focus on positions directly balancing authority operators did not
programs, such as those used in the responsible for real-time operations at receive adequate training in recognizing
nuclear industry, may result in setting this point. In contrast, National Grid and responding to system
requirements that go far beyond those expresses concern regarding the Staff emergencies.273 The ‘‘deficiency in
needed for many operations personnel. Preliminary Assessment’s suggestion to training contributed to the lack of
EEI notes that a drafting team has begun expand training to other functions with situational awareness and failure to
development of a new Reliability responsibilities for Bulk-Power System declare an emergency while operator
Standard for training, with a possible reliability. Specifically, it argues that intervention was still possible (before
filing date with the Commission near there is an implication that all events began to occur at a speed beyond
the end of 2006. employees listed within the categories human control.)’’ 274
763. ISO/RTO Council notes that identified by staff would be required to 771. PER–002–0 requires that each
many of the Requirements have ill- receive training even if some have no transmission operator and balancing
defined terms, no measures of responsibility for grid reliability. It authority shall be staffed with
compliance and lack specificity. ISO/ suggests that the staff’s comments in adequately trained personnel and
RTO Council argues that rather than this area should be taken by NERC as a directs the transmission operator and
defining the objective of the training cue to explore expanding training to balancing authority to have training
program, PER–002–0 leaves an necessary areas without requiring all programs for all their operating
individual entity to develop a training employees within a function or category personnel who occupy positions that
program on its own. Concurring with to receive training. either have primary responsibility,
the Staff Preliminary Assessment, 767. WECC/OTS notes that a full scale directly or indirectly, for the real-time
NYSRC, NERC and ReliabilityFirst state simulator can be an effective tool in operation of the Bulk-Power System or
that PER–002–0 should specify the operator training, but cautions against a who are directly responsible for
minimum requirements of a training requirement that all operating entities complying with the Reliability
program. Moreover, ISO/RTO Council employ a full-scale simulator, stating Standards. Transmission operators and
recommends that the PER Reliability that emergency training can be balancing authorities are not the only
Standards should specifically identify effectively provided through other entities that have operating personnel in
the positions that are directly means, i.e., drills or computer models. positions that directly impact the
responsible for complying with the With regard to the EPAct 2005 provision reliable operation of the Bulk-Power
proposed Reliability Standard. for training guidelines for non-nuclear System or must comply with the
764. NERC and WECC/OTS support electric energy industry personnel, it Reliability Standards. Reliability
the use of the SAT concept, which maintains that the provision should not coordinators, generator operators,
would customize training to the job apply to the ERO with the exception of operations planning and operations
requirements of each position. Although the operation function. Nonetheless, support staff also potentially impact the
WECC/OTS endorses the five-day WECC/OTS argues that training in other reliable operation of the Bulk-Power
training requirement, it asserts that areas cited in EPAct 2005 should be System, yet these entities are not
specifying a minimum number of covered in a specific course tailored to required to participate in mandatory
training hours devoted to a certain task the function’s effect on the real-time training programs. The Commission
or establishing a mandatory curriculum reliability of the Bulk-Power System. It agrees with NERC, WECC/OTS and
within the Reliability Standard is argues that requirements for initial National Grid and supports the
inconsistent with the SAT concept. It certification, assessment and
argues that the training needs of one recertification identified in EPAct 2005 272 Blackout Report at 107.
transmission operator may be quite 273 Id. at 157.
different from another due to size, 271 NERC, WECC/OTS and ISO/RTO Council. 274 Id.
expanding training programs to other training, mentoring and knowledge operator competency gaps within those
personnel with the ability to affect real- transfer from experienced operators. functions. WECC/OTS and NERC
time operations of the Bulk-Power Requirement R3 sets out broad support this approach in identifying the
System. The Commission proposes that objectives that a training program must tasks and associated skills and
such expansion be based on the role of satisfy, yet it does not specify the knowledge necessary to accomplish the
the entity rather than its size. Further, minimum expectations of an effective specific tasks of each operator. In
we note that NERC has stated that it has training program. In its comments, addition, they support implementing
asked its Reliability Standards drafting NERC agrees with the Staff Preliminary and evaluating a unique training plan to
team to prepare a request for a new Assessment that PER–002–0 must have address each operator’s competency
project to expand the scope of the minimum expectations and specific gap. NERC stated that the
training requirements to other positions criteria for training critical reliability implementation of minimum training
essential to reliability of the Bulk-Power personnel. The Commission concurs requirements, as well as an SAT
System. with NERC’s comments, calling for methodology, is essential to ensuring
772. After considering the comments measurable requirements regarding system operator competencies. NERC
of NERC and National Grid that the objectives, content, minimum hours of claims that a new Reliability Standard is
training programs should focus on training and types of training in the under development which will address
positions directly responsible for real- proposed Reliability Standard. The the above concerns. The Commission
time operations at this point in time, Commission proposes that NERC proposes that NERC explore the SAT
and in recognition of the need to give modify the Reliability Standard to methodology in its efforts to establish
first priority to real-time operations, the include minimum training requirements training plans tailored to the needs of
Commission proposes a modification of related to objectives, program content, various job functions and individuals.
PER–002–0 to include real-time minimum hours of training and types of 778. Requirement R4 of the Reliability
operations personnel from reliability training with specific performance Standard requires training in emergency
coordinators, generator operators, metrics to gauge the effectiveness of the operations using realistic simulations of
operations planning and operations training program. system emergencies. Several entities
support staff in training programs with 775. Although EEI cautions against currently use full scale operator training
a time phased effective date. The using the nuclear industry training simulators for this purpose with
phasing of the effective date would program as a model, we do not believe scenarios derived from actual system
acknowledge the priority of training that the use of an SAT method would disturbances supplemented with drills
each group. This prioritization is also set requirements that go beyond those to deal with communications during
supported by WECC/OTS which needed for many operating personnel. emergencies. WECC/OTS notes that the
cautions that limited training resources We agree with WECC/OTS that training use of such a simulator can be an
may be diverted from system operators based on SAT is a proven approach to effective tool in operator training
to other personnel that can effect identify the tasks and associated skills programs, but cautions against making
reliable operation at the expense of and knowledge necessary to accomplish this a requirement for all operating
those responsible for real-time those tasks, determine the competency entities. The Commission notes that
operations. level of each operator to carry out those there are various options available for
773. In order to maintain an adequate tasks, determine the competency gaps, providing operator training simulator
level of reliability, the Commission then design, implement and evaluate a capability, including contracting for this
proposes to require NERC to modify training plan to address each operator’s service from others who have developed
PER–002–0 in the future or to develop competency gaps. the capability. The Commission solicits
a new training Reliability Standard for 776. CenterPoint and National Grid comments on the benefits and
all personnel who may directly impact caution against being overly prescriptive appropriateness of required ‘‘hands-on’’
the reliable operation of the Bulk-Power and propose that the Commission focus training using simulators in dealing
System or for all personnel who have on desired outcomes. ISO/RTO Council with system emergencies as identified
responsibility for compliance with the stated that there is no definition for in the training related recommendations
Reliability Standards. These personnel ‘‘adequately trained operating made in studies of major outages.275
include operations planning and personnel’’ and suggested the adoption 779. The Commission proposes that
operations support staff. We disagree of performance metrics to ensure that this Reliability Standard be Applicable
with the comments of EEI and believe training results in competent operating to transmission operators, balancing
that this does not imply a one-size-fits- personnel. These are distinct from authorities, reliability coordinators,
all approach. Rather, this course of measures used to ensure compliance generator operators, and operations
action ensures the creation of training with the requirements. The Commission planning and operations support staffs
programs that are structured and strongly supports the adoption of that have a direct impact on the reliable
tailored to the different functions and performance metrics to ensure that operation of the Bulk-Power System.
needs of the personnel involved. training results in competent operating How local transmission and generation
774. A review of operator personnel. However, such performance control centers are incorporated into the
demographics reveals that a large metrics are not a substitute for an SAT definition of transmission operator and
percentage of electrical operators will developed training program. The generator operator is described in the
retire over the next five years. As these Commission proposes to require that COM Chapter. The extent of the training
older and more experienced operators NERC modify PER–002–0 to include shall take into account the need to
retire, the need for structured, performance metrics associated with the assure real time operators do not suffer
comprehensive and effective training effectiveness of the training program. because of the training needs of non-real
programs tailored to the needs of the 777. Effective training programs must time staff.
functions and individuals become even be structured and address competency 780. Accordingly, giving due weight
more crucial, and will need to be gaps of operating personnel. WECC/OTS to the technical expertise of the ERO
developed and implemented for states that SAT-based training plans and with the expectation that the
incoming operators who will not have tailor to the needs of not only various
benefited from years of on-the-job job functions, but also to individual 275 Id. at 107.
Reliability Standard will accomplish the 783. Moreover, staff noted that enforceable. In addition, we propose to
purpose represented to the Commission generator operators, who have direct that NERC develop modifications
by the ERO and that it will improve the responsibility for the real-time operation to the Reliability Standard, as discussed
reliability of the nation’s Bulk-Power of the Bulk-Power System and are below.
System, the Commission proposes to directly responsible for complying with 788. PER–003–0 requires applicable
approve Reliability Standard PER–002– NERC Reliability Standards, do not entities to staff real-time operation
0 as mandatory and enforceable. In require NERC-certification under this positions with NERC-certified
addition, pursuant to section 215(d)(5) Reliability Standard. personnel. The Commission interprets
of the FPA and § 39.5(f) of our this to include real-time operating
iii. Comments positions in a transmission operations
direct that NERC submit a modification 784. NERC does not agree with the control center that performs switching
to PER–002–0 that: (1) Identifies the Staff Preliminary Assessment’s view operations via SCADA for the Bulk-
expectations of the training for each job that the NERC System Operator Power System.
function; (2) develops training programs Certification Program Manual should be 789. Some commenters agree with
tailored to each job function with included in the Reliability Standard to staff that PER–003–0 should contain
consideration of the individual training be enforceable. It states that this is a minimum certification requirements,
needs of the personnel; (3) expands the procedural document and the while others do not. The Commission
Applicability to include reliability Certification Program is managed by an acknowledges the commenter’s
coordinators, generator operators, and independent Personnel Certification concerns and the convenience of
operations planning and operations Governance Committee as required by maintaining a procedural document that
support staff with a direct impact on the the standards of the National is separate from the Reliability Standard
reliable operation of the Bulk-Power Organization for Competency Assurance so that it can be modified without
System; (4) uses the SAT methodology and employment law. requiring a revision to the entire
785. WECC/OTS and NYSRC join Reliability Standard. Nevertheless, the
in its development of new training
with comments of the Staff Preliminary Commission believes that the minimum
programs; and (5) includes performance
Assessment in observing that the competencies that must be
metrics associated with the effectiveness
Applicability and Requirements demonstrated to become a certified
of the training program.
sections of PER–003–0 potentially operator and the minimum
d. Operating Personnel Credentials weaken the enforcement of this requirements to remain certified should
(PER–003–0) Reliability Standard. While WECC/OTS be included in PER–003–0. To address
i. NERC Proposal encourages Commission approval of commenter’s concerns, we propose that
PER–003–0 with the understanding that the ERO modify PER–003–0 to identify
781. PER–003–0 requires transmission NERC or another interested party will the minimum competencies operating
operators, balancing authorities and submit a Standard Authorization personnel must demonstrate to be
reliability coordinators to staff all Request to more specifically define certified, but not include the entire
operating positions that have a primary which functions should be performed Certification Program Manual.
responsibility for real-time operations or by certified personnel, NYSRC 790. Additionally, we note that
are directly responsible for complying recommends conditional approval of generator operators who have
with the Reliability Standards with PER–003–0. Although the ISO/RTO responsibility for real-time operation of
NERC-certified staff. NERC grants Council does not address staff’s the Bulk-Power System and who are
certification to operating personnel comment that the NERC Manual is not directly responsible for complying with
through a separate program documented enforceable, it agrees that the proposed the Reliability Standards are not
in the NERC System Operator Reliability Standard should contain designated in the Applicability section
Certification Manual and administered minimum Certification Requirements. It of PER–003–0, and therefore, do not
by an independent Personnel also implies that the NERC System require NERC-certification. We agree
Certification Governance Committee. Operator Certification Program Manual with the concerns articulated in the
contains the needed level of Staff Preliminary Assessment and we
ii. Staff Preliminary Assessment believe that this omission has the
requirements and measurability. In
782. In its Staff Preliminary contrast, WECC/OTS opposes including potential to impact the reliable
Assessment, staff stated that this the specific competencies operating operation of the Bulk-Power System.
Reliability Standard does not specify the personnel must demonstrate to meet the Therefore, the Commission proposes the
minimum competencies that operating certification requirements. It states that modification of PER–003–0 to include
personnel must demonstrate to meet the these details are retained with the generator operators as applicable
certification requirements.276 Although certification program governance body. entities.
NERC’s System Operator Certification 786. ReliabilityFirst disagrees with 791. Accordingly, giving due weight
Program Manual outlines the the Staff Preliminary Assessment’s to the technical expertise of the ERO
requirements for certification, the comments regarding PER–003–0. It and with the expectation that the
manual is not a part of the proposed asserts that personnel are obligated to Reliability Standard will accomplish the
Reliability Standard. Therefore, staff follow the appropriate NERC process to purpose represented to the Commission
contended that the Manual is not become certified. It argues that PER– by the ERO and that it will improve the
enforceable.277 003–0 should make reference to this as reliability of the nation’s Bulk-Power
a stand-alone manual that could be System, the Commission proposes to
adjusted and maintained without approve Reliability Standard PER–003–
276 Staff Preliminary Assessment at 89–90.

277 North American Electric Reliability Council’s affecting the current Reliability 0 as mandatory and enforceable. In
Application for Certification as the Electric Standard. addition, we propose to direct NERC to
Reliability Organization, Rules of Procedure of the modify the Reliability Standard to
Electric Reliability Organization, System Operator iv. Commission Proposal address the Commission’s concerns. In
Certification Program Manual, Appendix 6 available
at ftp://www.nerc.com/pub/sys/all_updl/ero/ 787. The Commission proposes to addition, pursuant to section 215(d)(5)
application/ERO-Application-Complete.pdf. approve PER–003–0 as mandatory and of the FPA and § 39.5(f) of our
regulations, the Commission proposes to under development, includes reliability regard to PER–003–0, this proposed
direct NERC to submit a modification to coordinators in the applicability section. Reliability Standard serves an important
PER–003–0 that: (1) Expands the 796. ReliabilityFirst, NYSRC and ISO/ purpose of ensuring that reliability
Applicability to include generator RTO all note the Reliability Standard’s coordinator personnel are adequately
operators; (2) specifies the minimum lack of Measures and Levels of Non- trained. Further, NERC should provide
competencies that must be Compliance. Measures and Levels of Non-
demonstrated to become and remain a iv. Commission Proposal Compliance for this proposed Reliability
certified operator; and (3) identifies the Standard. Nonetheless, the
minimum competencies operating 797. The Commission proposes to Requirements set forth in PER–003–0
personnel must demonstrate to be approve PER–004–0 as mandatory and are sufficiently clear and objective to
certified (but not include the enforceable. In addition, we propose provide guidance for compliance.
Certification Program Manual). directing that NERC develop 801. Accordingly, giving due weight
modifications to the Reliability to the technical expertise of the ERO
e. Reliability Coordination—Staffing Standard, as discussed below. and with the expectation that the
(PER–004–0) 798. A reliability coordinator is the Reliability Standard will accomplish the
i. NERC Proposal entity with the highest level of authority purpose represented to the Commission
that is responsible for the reliable by the ERO and that it will improve the
792. PER–004–0 ensures that
operation of the Bulk-Power System, has reliability of the nation’s Bulk-Power
reliability coordinator personnel are
a ‘‘wide area view,’’ and has the System, the Commission proposes to
adequately trained, NERC-certified, and
operating tools, processes and approve Reliability Standard PER–004–
staffed 24 hours a day, seven days a
procedures, including authority to 0 as mandatory and enforceable. In
week with properly trained and certified
prevent or mitigate emergency operating addition, pursuant to section 215(d)(5)
individuals. Further, reliability
situations in both next-day analysis and of the FPA and § 39.5(f) of our
coordinator operating personnel must
real-time operations.279 Most of the regulations, the Commission proposes to
have a comprehensive understanding of
Requirements for PER–004–0 address direct that NERC submit a modification
the area of the Bulk-Power System over
training issues pertaining to reliability to PER–004–0 that: (1) Includes formal
which they are responsible, including
coordinators, yet there is no training requirements for reliability
familiarity with transmission operators,
requirement for a formal training coordinators similar to those addressed
generator operators and balancing
program for reliability coordinators that under the personnel training Reliability
authorities, as well as their operating
is similar to the program required for Standard PER–002–0; (2) includes
practices and procedures, equipment
transmission operators under PER–002– requirements pertaining to personnel
capabilities and restrictions, system
0. We believe that the addition of formal credentials for reliability coordinators
operating limits and interconnection
training requirements for reliability similar to those in PER–003–0; and (3)
reliability operating limits.278 In
coordinators will help to ensure includes Levels of Non-Compliance and
addition the reliability coordinator must
adequate training and competency for Measures that address staffing
complete a minimum of five days per
an entity that plays a critical role in requirements and the requirement for
year of emergency operations training in
ensuring the reliability of the five days of emergency training.
addition to the training required to
interconnected grid. To ensure that the
maintain qualified operating personnel. 10. PRC: Protection and Control
793. NERC indicates that it will training requirements for reliability
modify this proposed Reliability coordinators are comprehensive, we a. Overview
Standard to address the lack of propose that the ERO either modify 802. Protection and Control (PRC)
Measures and Levels of Non- PER–006–0 to include the same quality systems on Bulk-Power System
Compliance and resubmit the proposal and clarity as the training requirements elements are an integral part of reliable
for Commission approval in November for other operating personnel as set forth grid operation. Protection systems are
2006. in PER–002–0 or, alternatively, given designed to detect and isolate a faulted
the high priority work that the ERO element from the system, thereby
ii. Staff Preliminary Assessment must accomplish it may want to limiting the severity and spread of
794. The Staff Preliminary consider including the reliability system disturbances and preventing
Assessment noted that there was no coordinator as an applicable entity in possible damage to protected elements.
formal training program requirement for PER–002–0. Similarly, we propose that SOLs and IROLs are only valid when
reliability coordinators similar to the the ERO either modify PER–006–0 to they recognize the function, settings and
program required for transmission address personnel credentials for limitations of the protection system.
operators and balancing authority reliability coordinators in a similar One of the common factors among the
personnel under PER–002–0. manner as for other operating personnel major outages from 1965 to 2003 was
in PER–003–0 or, alternatively, it may the lack of coordination of system
iii. Comments address this concern by including protection.280
795. ReliabilityFirst notes that PER– reliability coordinators as an applicable 803. The PRC Reliability Standards
004–0 does require reliability entity in PER–006–0. apply to transmission operators,
coordinators to be NERC-certified and to 799. We agree with commenters that transmission owners, generator
complete required training. WECC/OTS Measures and Levels of Non- operators, generator owners,
states that the NERC System Personnel Compliance should be added to the distribution providers and regional
Training Reliability Standard, which is proposed Reliability Standard, reliability organizations and cover a
including Measures to address staffing
wide range of topics related to the

278 A comprehensive understanding of a requirements and the minimum five protection and control of power
reliability coordinator’s ‘‘area’’ includes: Familiarity days of emergency training. systems.281 NERC has recognized that
with transmission operators, generator operators 800. While the Commission has
and balancing authorities, as well as their operating
practices and procedures, equipment capabilities identified a number of concerns with 280 BlackoutReport at 107.
and restrictions, system operating limits and 281 Topicsaddressed under the PRC Reliability
interconnection reliability operating limits. 279 See NERC glossary at 11. Standards include: system protection coordination,
the Reliability Standards do not form a Reliability Standard may hinder element has failed or is out of service.
complete set of PRC Reliability consistent and effective enforcement. Repair or replacement of the failed
Standards to meet the goal of protection element or an alternate
iii. Comments
reliability.282 corrective solution, such as operator
804. Generally, the proposed 807. NERC agrees with staff that PRC– control action, must be implemented to
Reliability Standards in the PRC group 001–0 requires modification and satisfy performance requirements.
raise issues related to Measures, Levels requests that the Commission ReliabilityFirst concludes that a specific
of Non-compliance, and Requirements. conditionally approve it. NERC reasons time for repairing the failed protection
that even if a generator operator fails to system element is not necessary if
The regional reliability organization is
tend to a protective relay failure, other performance requirements must be
the compliance monitor for twelve of
proposed Reliability Standards still maintained.
the PRC Reliability Standards 283 and
require the transmission operator and
the applicable entity for seven of iv. Commission Proposal
reliability coordinator to ensure reliable
them.284
operation of the grid by mitigating SOL 811. The Commission proposes to
b. System Protection Coordination and IROL violations as soon as possible. approve PRC–001–0 as mandatory and
(PRC–001–0) In addition, NERC indicates that it will enforceable. In addition, we propose to
i. NERC Proposal modify this Reliability Standard to direct that NERC develop modifications
include missing Measures and Levels of to the Reliability Standard as discussed
805. Proposed Reliability Standard Non-Compliance and resubmit it for below.
PRC–001–0 ensures that protection Commission approval in November 812. We recognize that protection and
systems are coordinated among 2006. control systems are integral part of
operating entities by requiring 808. CPUC argues that ‘‘action reliable grid operation and agree that
transmission operators and generator adequate to bring the system into protection systems affect the validity of
operators to notify appropriate entities balance’’ may be ambiguous, i.e., a more IROLs. We further note that if a non-
of relay or equipment failures that could effective action taken in 35 minutes may redundant protection system for a
impact system reliability. In addition, be preferable to a less effective action critical element fails and no corrective
these entities must coordinate with taken in 28 minutes in an attempt to control action is taken, the system could
appropriate entities when new follow the 30-minute time limit be subject to the risk of cascading failure
protection systems are installed or when specified under the IRO and TOP if a critical contingency subsequently
existing protection systems are Reliability Standards. It also stated that occurred.
modified. the Staff Preliminary Assessment’s 813. The Commission emphasizes the
concern apparently relates to the August importance of immediately informing
ii. Staff Preliminary Assessment 2003 Blackout, where operators failed to transmission operators and generator
806. The Staff Preliminary take effective action in the very short operators of any protection failure that
time frame required to prevent may affect SOLs and IROLs so that they
Assessment pointed out that
cascading outages throughout the can take corrective control action to
Requirement R2 of PRC–001–0 instructs
region. CPUC questions the extent to maintain reliable system operations. We
transmission operators or generator
which a rigid 30-minute maximum time further note that PRC–001–0 or other
operators to take corrective action as
limit would have prevented much of the relevant PRC Reliability Standards do
soon as possible where a protective
system dysfunction that occurred in not contain such a Requirement.
relay or equipment failure reduces 814. PRC–001–0 should designate a
system reliability. However, PRC–001–0 August 2003.
809. National Grid suggests that maximum time limit for corrective
does not designate a maximum time control action where the failure of a
requiring a maximum time period for
period for corrective control actions. protection system element has reduced
corrective actions where a protective
This is inconsistent with the system reliability and undermined
relay or equipment failure reduces
requirement that system operators re- performance requirements. The
reliability inappropriately mixes
adjust the system within 30 minutes for Commission commends NERC’s
protection design engineering issues
contingencies under the proposed IRO initiative in attempting to address and
with operational issues. National Grid
and TOP Reliability Standards. Staff clarify this issue in PRC–001–0.
asserts that the proposed Reliability
also noted that the lack of Measures and However, we do not agree with NERC
Standard addresses design engineering
Levels of Non-Compliance in this that even if a generator operator fails to
and specifying a maximum time period
for corrective actions to respond to tend to a protective relay failure, other
disturbance monitoring, under-frequency load proposed Reliability Standards still
shedding (UFLS), special protection systems,
protective equipment failures would be
under-voltage load shedding (UVLS) and their inappropriate. Further, CenterPoint require the transmission operator and
assessments, database, event and mis-operation states that the amount of time required reliability coordinator to ensure the
analysis, maintenance and testing requirements and to diagnose and correct different types reliable operation of the grid by
performance evaluation. mitigating SOL and IROL violations as
282 See NERC Planning Standards Phase III-IV,
of failures varies. It explains that
available at http://www.nerc.com/∼filez/standards/ investigating and correcting relay soon as possible, i.e., respecting
Phase-III–IV.html. failures is a fundamentally different performance requirements. We believe
283 The regional reliability organization is exercise from that of real-time operators that the Reliability Standards on
assigned compliance monitoring responsibility taking corrective actions in response to mitigating IROL violations are not
under the following Reliability Standards in the specific enough and system operators or
PRC group: PRC–004–1; PRC–005–1; PRC–007–0;
operating contingencies that may occur.
810. ReliabilityFirst agrees that a field protection and control personnel
PRC–008–0; PRC–009–0; PRC–010–0; PRC–011–0;

PRC–015–0; PRC–016–0; PRC–017–0; PRC–018–1; failed protection system element must would not be alerted about failures of
PRC–021–1; and PRC–22–1. be replaced as soon as possible, but relays and protection systems on critical
284 The regional reliability organization is listed
agrees with staff that PRC–001–0 should elements. Therefore, in addition to
as the applicability entity under the following
Reliability Standards in the PRC group: PRC–002–
clearly state that system performance clarifying the ambiguity in future
0; PRC–003–1; PRC–006–0; PRC–012–0; PRC–013– requirements must continue to be met revision, we propose to require NERC to
0; PRC–014–0; and PRC–020–1. when the affected protection system include a requirement that the
appropriate transmission operators or actions in the same manner used to c. Define Regional Disturbance
generator operators should be notified mitigate IROL violations as stipulated in Monitoring and Requirements (PRC–
immediately upon detection of failures relevant IRO and TOP Reliability 002–1)
on relays or protection systems on Bulk- Standards, as soon as possible but no i. NERC Proposal
Power System elements so that they can more than 30 minutes.
maintain system reliability requirements 818. The Commission agrees with 821. Proposed Reliability Standard
by taking corrective actions in the same ReliabilityFirst that protection system PRC–002–1 ensures that each regional
manner used to mitigate IROL elements must be replaced as soon as reliability organization establishes
violations. possible, and PRC–001–0 should clearly requirements to install Disturbance
815. The Commission does not agree state that system performance Monitoring Equipment (DME) and
with National Grid’s comment that requirements must continue to be met report disturbance data to facilitate
staff’s concern inappropriately mixes analyses of events and verify system
when the affected protection system
protection design engineering issues models.
element is out of service.
with operational issues. Design 822. NERC’s August 28, 2006
819. Although the Commission has Supplemental Filing, as corrected on
engineering refers to protection system identified concerns regarding PRC–001–
schemes with protective elements, such September 12, 2006, includes a revised
0’s lack of a maximum interval for version of PRC–002–0, designated as
as relays. Furthermore, the applicable corrective control action when a
entities for design engineering would PRC–002–1. This revised Reliability
protection system element has failed Standard still applies to regional
include field protection and control and reduced reliability, i.e., system
personnel who are responsible for reliability organizations. Both of the
performance requirements, we believe original Requirements have been
carrying out the inspection, replacement that the proposed Reliability Standard
and repair of damaged protection substantially revised.285 Requirement
provides a good base and is integral to R1 from version 0 was substantially
system elements. PRC–001–0 requires ensuring that system protection is
transmission operators or generator revised to require the regional reliability
coordinated among operating entities. organization to establish certain
operators to carry out corrective actions The Commission also believes that it is
because this Reliability Standard installation requirements for sequence
important for NERC to provide of event recording. Requirement R2
addresses system performance
Measures and Levels of Non- from version 0 was modified to replace
requirements. We believe that the Staff
Compliance for the proposed Reliability the regional reliability organization with
Preliminary Assessment correctly
Standard. However, the Requirements transmission owners and generator
advocated the establishment of a
set forth in PRC–001–0 are sufficiently owners and designated as Requirement
maximum time period for corrective
clear and objective to provide guidance R5 in version 1. The revised PRC–002–
control actions when a protective relay
for compliance. 1 includes four new Requirements:
or equipment failure reduces reliability,
i.e., performance requirements that are 820. Accordingly, giving due weight Requirement R2 (installation
consistent with mitigating IROL to the technical expertise of the ERO requirement for fault recording),
violations. and with the expectation that the Requirement R3 (installation
816. The Commission believes that Reliability Standard will accomplish the requirement for dynamic disturbance
CenterPoint also misinterpreted the purpose represented to the Commission recording), Requirement R4 (disturbance
Staff Preliminary Assessment’s concern. by the ERO and that it will improve the data reporting requirements), and
The Staff Preliminary Assessment reliability of the nation’s Bulk-Power Requirement R6 (regional reliability
advises the addition of a requirement System, the Commission proposes to organization requirement to periodically
that transmission operators carry out approve Reliability Standard PRC–001– review, update, and approve regional
corrective control actions to return the 0 as mandatory and enforceable. In requirements for disturbance monitoring
system to a secure state, i.e., respecting addition, pursuant to section 215(d)(5) and reporting). In PRC–002–1, two new
system performance requirements, by of the FPA and § 39.5(f) of our Measures for Requirements R4 and R6
recognizing the reduction in IROL due regulations, the Commission proposes to have been added and compliance was
to a failed relay or protection system direct that NERC submit a modification modified to include new Requirements.
elements in no longer than 30 minutes. to PRC–001–0 that: (1) Includes
It is generally understood that the Measures and Levels of Non-
corrective actions stated in this Compliance; (2) includes a requirement 823. The Staff Preliminary
Reliability Standard do not include that relevant transmission operators and Assessment noted that PRC–002–0 is a
actions requiring the field protection generator operators must be informed fill-in-the-blank standard and identifies
and control personnel to respond and immediately upon the detection of the regional reliability organization as
repair faulty relays or failed protection failures in relays or protection system the sole applicable entity, and PRC–
system elements as this type of repair elements on the Bulk-Power System that 002–1 does as well.
would normally take hours, if not days. would threaten reliable operation, so iii. Comments
817. The Commission does not share that these entities can carry out the
appropriate corrective control actions 824. A number of commenters
CPUC’s view that the Staff Preliminary
discussed how the Commission should
Assessment is advocating a rigid 30- consistent with those used in mitigating
address PRC–002–1 and other
minute requirement to re-adjust the IROL violations; and (3) clarifies that,
Reliability Standards in the PRC group
system or fix or replace failed protection after being informed of failures in relays
that are ‘‘fill-in-the-blank’’ standards.286
system elements. Since failures of relays or protection system elements on the
or protection system elements would Bulk-Power System, transmission
285 We note that PRC–002–0 has been revised and

expose the Bulk-Power System to operators or generator operators shall separated into two Reliability Standards, PRC–002–
cascading outages through a possible carry out corrective control actions, i.e., 1 (Define Regional Disturbance Monitoring and
failure to respect performance returning the system to a stable state Reporting Requirements) and PRC–018–1
(Disturbance Monitoring Equipment Installation
requirements, we believe that that respects system requirements as and Data Reporting).
transmission operators and generator soon as possible and no longer than 30 286 CPUC, FRCC, National Grid, NPCC, NYSRC,
operators must take corrective control minutes. ReliabilityFirst, Southern and TANC. Their
CPUC and National Grid share the Staff d. Regional Procedure for Analysis of ‘‘just, reasonable, not unduly
Preliminary Assessment’s concern that Misoperations of Transmission and discriminatory or preferential, and in
certain ‘‘fill-in-the-blank’’ Reliability Generation Protection Systems (PRC– the public interest.’’ Accordingly, the
Standards are not written in a manner 003–1) Commission will not propose to accept
allowing enforcement against users, i. NERC Proposal or remand this Reliability Standard
owners and operators of the Bulk-Power until the ERO submits additional
System. They point out that some of 828. PRC–003–1 ensures that all information. In the interim, compliance
these Reliability Standards must be transmission and generation protection with PRC–003–1 should continue on its
‘‘substantively regional’’ due to their system misoperations are analyzed, and present basis, and the Commission
unique characteristics and the physical corrective action plans are developed. considers compliance with the
realities of various regional transmission Misoperations occur when a protection Reliability Standard to be a matter of
grids, citing examples such as under- system operates when it should not or good utility practice.
frequency load shedding (UFLS) and does not operate when it should have.
This Reliability Standard requires the e. Analysis and Reporting of
under-voltage load shedding (UVLS) Transmission Protection System
schemes, which are necessarily regional reliability organization to
develop a procedure to monitor and Misoperations (PRC–004–1)
regionally unique. Further, they state
that some are ‘‘procedurally regional’’ review misoperations of protection i. NERC Proposal
because they must be implemented by a systems as well as the development and 833. Proposed Reliability Standard
regional body.287 National Grid urges documentation of corrective actions. As PRC–004–1 ensures that all
the Commission and NERC that any discussed in PRC–002–0, this is one of transmission and generation protection
revision of these Reliability Standards the proposed Reliability Standards system misoperations affecting the
must adequately address these referred to as a ‘‘fill-in-the-blank’’ reliability of the Bulk-Power System are
substantive and procedural concerns. Reliability Standard. analyzed and mitigated by requiring
825. Southern indicates that the ii. Staff Preliminary Assessment transmission owners, generator owners
industry and NERC are currently and distribution providers that own a
829. Similar to its discussion of PRC– transmission protection system to
considering revisions to the ‘‘fill-in-the- 002–0, staff noted that this Reliability
blank’’ standards. It states that revision analyze and document protection
Standard designates a regional system misoperations. These entities
would require a significant amount of reliability organization as the sole
time and coordination within the must also develop corrective action
applicable entity. Staff was concerned plans in accordance with the regional
industry. Mandatory Reliability about the feasibility of a regional reliability organization’s procedures.
Standards must enhance and not detract reliability organization serving as the
from reliability. applicable entity and the enforceability ii. Staff Preliminary Assessment
826. TANC advises the Commission to of the proposed Reliability Standard in 834. No substantive issues were
approve these ‘‘fill-in-the-blank’’ the mandatory Reliability Standards identified regarding PRC–004–1.
Reliability Standards on an interim structure.
iii. Comments
basis until the applicable Regional iii. Comments
Entities and NERC have conducted the 835. MEAG states that, if a
appropriate approval procedure and are 830. A number of commenters distribution provider owns a
able to re-submit these Reliability discussed how the Commission should transmission protection system, the
Standards in final form to the address PRC–003 and other Reliability distribution provider is also a
Commission for its approval. Standards in the PRC group that are transmission owner according to
‘‘fill-in-the-blank’’ standards. In NERC’s glossary definition. MEAG
iv. Commission Proposal addition, ISO/RTO Council states that comments that it is unnecessary,
PRC–003–1 needs to better define the overbroad and contrary to FPA section
827. Because regional procedures contents of the procedures in the 215 to include distribution providers in
have not been submitted to the Requirements and that the proposed any of the proposed PRC Reliability
Commission, it is not possible to Reliability Standard is unclear about Standards when the term ‘‘transmission
determine at this time whether PRC– how it may be effectively measured. owner’’ is sufficient to cover the scope
002–1 satisfies the statutory requirement
iv. Commission Proposal of entities that own transmission
that a proposed Reliability Standard be
protection systems.
‘‘just, reasonable, not unduly 831. The Commission does not share 836. ISO/RTO Council comments that
discriminatory or preferential, and in ISO/RTO Council’s view that a better PRC–004–1 should clarify the definition
the public interest.’’ Accordingly, the definition of the contents of the regional of what the procedures must contain
Commission will not propose to accept reliability organization’s procedure is and how PRC–004–1 can be effectively
or remand this Reliability Standard required. We refer to the list of elements measured.
until the ERO submits additional that are included in Requirements R1.1
information. In the interim, compliance to R1.5 to address transmission system iv. Commission Proposal
with PRC–002–1 should continue on its protection misoperations. In addition, 837. We disagree with the ISO/RTO
present basis, and the Commission we note that PRC–003–1 contains two Council that the Requirements and
considers compliance with the Measures requiring these procedures to Measures of the proposed Reliability
Reliability Standard to be a matter of be available and submitted on a timely Standard are unclear. Requirement R1
good utility practice. basis upon request. requires the owners of transmission
832. Because the regional procedures protection systems to analyze all

comments also apply to PRC–003–1, PRC–006–0, have not been submitted to the protection system misoperations, take
PRC–012–0, PRC–013–0; PRC–014–0 and PRC–020– Commission, it is not possible to corrective actions and provide the
1.
287 An example of this is PRC–013–0, which determine at this time whether PRC– associated analysis documents with
requires the establishment of a regional database for 003–1 satisfies the statutory requirement corrective action plans to NERC. Further
special protection systems. that a proposed Reliability Standard be PRC–004–1 contains Measures that
these owners have evidence that they not specify the criteria to determine the 848. Accordingly, giving due weight
analyzed protection system appropriate maintenance intervals, and to the technical expertise of the ERO
misoperations and took corrective they do not specify maximum allowable and with the expectation that the
actions, with all associated maintenance intervals for the Reliability Standard will accomplish the
documentation provided. protections systems.288 purpose represented to the Commission
838. The applicability section of PRC– 842. Staff cited PRC–006–0 as good by the ERO and that it will improve the
004–1 provides that, inter alia, a example of a Reliability Standard that reliability of the nation’s Bulk-Power
‘‘Distribution Provider that owns a requires periodic assessments of the System, the Commission proposes to
transmission Protection System’’ must effectiveness of regional UFLS programs approve Reliability Standard PRC–005–
comply with this Reliability Standard. at least once every five years regardless 1 as mandatory and enforceable. In
This applicability provision makes clear of the circumstance. addition, pursuant to section 215(d)(5)
that the Reliability Standard applies iii. Comments of the FPA and § 39.5(f) of our
only to a subset of distribution regulations, the Commission proposes to
providers. We believe that this approach 843. NERC states that it welcomes direct that NERC submit a modification
is appropriate. With regard to MEAG’s discussion and debate on the proper to PRC–005–1 that includes a
concern, the Commission disagrees with study and maintenance intervals for requirement that maintenance and
MEAG that a distribution provider by regular and special protection systems. testing of a protection system must be
virtue of owning transmission It will consider these comments in the carried out within a maximum
protection equipment becomes a re-authorization of these Reliability allowable interval that is appropriate to
transmission owner, which would then Standards or the development of future the type of the protection system and its
be subject to all of the Reliability Reliability Standards. Within its impact on the reliability of the Bulk-
Standards applicable to a transmission existing scope, the NERC System Power System.
Protection and Controls Task Force will
owner. g. Development and Documentation of
examine all PRC Reliability Standards
839. Reliability Standard PRC–004–1 Regional UFLS Programs (PRC–006–0)
for consistency and technical
serves an important purpose in ensuring
completeness. It will then propose any i. NERC Proposal
that transmission and generation
appropriate modifications through the
protection system misoperations 849. Proposed Reliability Standard
standards process.
affecting the reliability of the Bulk- PRC–006–0 ensures the development of
844. ISO/RTO Council echoes the
Power System are analyzed and a regional UFLS program that will be
concerns of the Staff Preliminary
mitigated. For the reasons discussed used as a last resort to preserve the
Assessment that the proposed
above, the Commission believes that Bulk-Power System during a major
Reliability Standard must define the
Reliability Standard PRC–004–1 is just, missing maintenance intervals. system failure that could cause system
reasonable, not unduly discriminatory 845. ReliabilityFirst contends that the frequency to collapse. PRC–006–0 is a
or preferential, and in the public purpose of PRC–005–1 does not call for ‘‘fill-in-the-blank’’ standard that
interest; and proposes to approve it as specific justification for allowable requires the regional reliability
mandatory and enforceable. maintenance intervals, it calls for organization to develop, coordinate,
intervals only. However, it urges NERC document and assess UFLS program
f. Transmission Protection System design and effectiveness at least every
Maintenance and Testing (PRC–005–1) to develop maximum allowable
intervals based on reliability-centered five years.
i. NERC Proposal study results developed by the regions ii. Staff Preliminary Assessment
840. Proposed Reliability Standard and companies therein.
850. The Staff Preliminary
PRC–005–1 ensures that all iv. Commission Proposal Assessment identified two concerns for
transmission and generation protection PRC–006–0: (1) A regional reliability
systems affecting the reliability of the 846. The Commission proposes to
approve PRC–005–1 as mandatory and organization is identified as the sole
Bulk-Power System are maintained and applicable entity; and (2) it lacks the
tested by requiring the transmission enforceable. In addition, we propose to
direct that NERC develop modifications proper specificity for an integrated and
owners, distribution providers, and coordinated approach for the protection
generator owners to develop, document, to the Reliability Standard as discussed
below. systems for generators, transmission
and implement a protection system lines and UFLS and UVLS programs as
maintenance program that may be 847. Proposed Reliability Standard
PRC–005–1 does not specify the criteria recommended by the Blackout
reviewed by the regional reliability Report.289
organization. to determine the appropriate
maintenance intervals, nor does it Staff also pointed out that the
ii. Staff Preliminary Assessment specify maximum allowable proposed Reliability Standard requires a
maintenance intervals for the periodic assessment of the effectiveness
protections systems. The Commission of the regional UFLS programs and
Assessment stated that protection
therefore proposes that NERC include a design details at least once every five
systems must be maintained and tested
requirement that maintenance and years, which is a good example of a
at regular intervals to ensure that they
testing of these protection systems must maximum allowable interval without
will operate as intended when called
be carried out within a maximum specific justification.
upon and that maintenance intervals
vary depending on the type and nature allowable interval that is appropriate to iii. Comments
of the protection system, as well as the the type of the protection system and its
851. NERC claims that it is addressing
reliability impact of a potential failure impact on the reliability of the Bulk-

Power System. Staff’s concern that PRC–006–0 lacks an
of that system. Staff identified several integrated and coordinated approach to
Reliability Standards in the PRC group 288 Staff identified several other PRC Reliability protection for generators, transmission
addressing the maintenance and testing Standards such as PRC–005–1, PRC–008–0, PRC–
of different protection systems that are 011–0 and PRC–017–0 that contain similar 289 Blackout Report, Recommendation No. 21 at
technically deficient because they do concerns. 159.
lines and UFLS and UVLS programs Reliability Standard to be a matter of reconfiguration to disconnect large
within its work on the ‘‘fill-in-the- good utility practice. Although we do blocks of load as a part of their load
blank’’ proposed Reliability Standards. not propose to approve or remand with shedding plans. The Commission views
However, NERC points out that regard to MOD–002–0 at this time, we PRC–006–0 and EOP–003–0 as two
Requirement R3 of EOP–003–0 obligates address comments and our additional separate and necessary Reliability
transmission operators and balancing concerns regarding this Reliability Standards and the small overlap
authorities to coordinate load shedding Standard below. between the two is necessary to ensure
plans among other interconnected 856. The Commission commends that effective load shedding capabilities
transmission operators and balancing NERC’s initiative in adopting an are available to address a wide range of
authorities. integrated and coordinated approach to emergency operating conditions.
852. Alcoa contends that proposed protection for generators, transmission 858. The Commission disagrees with
Reliability Standards PRC–006–0 and lines and UFLS and UVLS programs CenterPoint that adequate integration
EOP–003–0 essentially assign similar within its work on the ‘‘fill in the and coordination is already included in
responsibilities to different entities, blank’’ proposed Reliability Standards. PRC–006–0 because this is contrary to
thereby creating the potential for Responding to NERC’s comments on NERC’s initiative in adopting an
ambiguity. It states that while EOP–003– Requirement R3 of EOP–003–0, the integrated and coordinated approach to
0 applies to transmission operators and Commission cautions that it only protection for generators, transmission
balancing authorities and PRC–006–0 addresses a relatively small portion of lines and UFLS and UVLS programs.
applies to regional reliability the coordination of load shedding plans However, we support CenterPoint’s
organizations, requirements in both among other interconnected entities, but recommendation that the generator
proposed Reliability Standards mandate still lacks the main and overall under-voltage ride-through capability is
the design of a load shedding scheme, integration and coordination an important element that should be
including frequency set points as a requirements for all protection systems included in the integrated and
design component, under abnormal in the Bulk-Power System. coordinated approach among relay
system conditions. 857. The Commission disagrees with protection for generators and
853. CenterPoint believes that the Alcoa that Reliability Standards PRC– transmission lines and the use of UFLS
proposed Reliability Standard 006–0 and EOP–003–0 essentially assign and UVLS programs.
adequately addresses the integration similar responsibilities to different 859. In response to ReliabilityFirst’s
and coordination issues, but does not entities, thereby creating the potential suggestion to include additional
address coordination between the for ambiguity. There are distinctive definitive measures to meet system
generator low voltage ride-through features of UFLS programs which are performance, the Commission believes
requirement, UVLS and dynamic designed to trip load automatically that the technical requirements should
voltage recovery requirements. Further, within seconds upon detection of first include the integrated and
it states that such coordination is not abnormal system conditions due to the coordinated approach in Bulk-Power
addressed by the proposed Reliability imbalance of generation and load System protection, including the
Standard because the underlying resulting in rapidly declining frequency response of the
requirements are missing. interconnected system frequencies. interconnection to load and generation
854. ReliabilityFirst suggests that Therefore, the design and coordination loss. Compliance Measures should be
NERC should develop an of UFLS programs must be region-wide definitive to ensure these technical
Interconnection-based program and use or Interconnection-wide to ensure their requirements are met.
the programs developed by the regions effectiveness as covered by PRC–006–0.
h. Assuring Consistency With Regional
within the Interconnection as a starting The load shedding plans that are
UFLS Program Requirements (PRC–007–
point. It believes that the primary covered in EOP–003–0 are also required
0)
objective of the proposed Reliability as an operating measure of last resort to
Standards is to meet system address system emergencies in which i. NERC Proposal
performance requirements and suggests declining system frequency may not be 860. Proposed Reliability Standard
that more definitive measurable a prevailing indicator. Instead, system PRC–007–0 requires transmission
requirements should be developed to voltages may fast approach voltage owners, transmission operators, load-
create an integrated and coordinated instability, system elements may be serving entities, and distribution
approach to Bulk-Power System severely overloaded or an IROL of a providers to provide, and annually
protection. critical interface may be severely update, their under-frequency data to
exceeded. All of these are indicators of facilitate the regional reliability
an imminent threat of cascading outages organization’s maintenance of, and
855. Because the regional procedures while system operators have exhausted updates to, the UFLS program database.
have not been submitted to the all available corrective actions to return Transmission owners and distribution
Commission, it is not possible to the system to a secure state. In addition, providers must provide documentation
determine at this time whether PRC– load shedding plans usually consist of of their UFLS program to the regional
006–0 satisfies the statutory requirement several components including UFLS or reliability organization.
that a proposed Reliability Standard be UVLS with different levels of response
‘‘just, reasonable, not unduly time to facilitate load shedding. Some ii. Staff Preliminary Assessment
discriminatory or preferential, and in load shedding capability is achieved via 861. No substantive issues were
the public interest.’’ Accordingly, the remote SCADA control from the identified regarding PRC–007–0.
Commission will not propose to accept transmission operators’ control room
or remand this Reliability Standard and some via manual disconnection by iii. Comments
until the ERO submits additional load serving entities under direct order 862. CPUC states that PRC–007–0 is
information. In the interim, compliance from a transmission operator or an example of a Reliability Standard
with PRC–006–0 should continue on its reliability coordinator during system that should be mandatory on a national
current basis, and the Commission emergencies. In some cases, level, but for which it is appropriate for
considers compliance with the transmission operators may use system the details of implementation to be
delegated to a regional reliability allowable maintenance intervals for the inappropriately relies on the undefined
organization. ISO/RTO Council states protection systems. The Commission UFLS programs of regional reliability
that PRC–007–0 fails to define an agrees and proposes to require NERC to organizations, NERC must review and
acceptable UFLS program. modify the proposed Reliability approve the regional reliability
Standard to include a requirement that organizations’ programs before the
maintenance and testing of UFLS proposed Reliability Standard can go
863. With regard to ISO/RTO programs must be carried out within a into effect.
Council’s comment, the specification of maximum allowable interval that is 875. TAPS states that PRC–009–0
an acceptable UFLS program is the appropriate to the type of relay used and requires distribution providers with a
subject of PRC–006–0. In contrast, PRC– the impact on the reliability of the Bulk- transmission protection program to
007–0 provides that, if an entity has a Power System. analyze an under-frequency event and
UFLS program, the program must be 870. Accordingly, the Commission document the post-mortem. It cautions
consistent with its regional reliability proposes to approve Reliability that it may be difficult and unduly
organization’s requirements. Standard PRC–008–0 as mandatory and burdensome for a small entity to
864. The Commission believes that enforceable. In addition, the perform given limited access to event
there are no substantive issues with this Commission proposes to direct that data and the need to perform a stability
proposed Reliability Standard. We note NERC submit a modification to PRC– analysis.
that, once approved, the proposed 008–0 that includes a requirement that 876. CenterPoint suggests adopting a
Reliability Standard will be applied and maintenance and testing of UFLS performance metric approach rather
enforced on a national scale as programs must be carried out within a than a ‘‘fill-in-the-blank’’ approach to
suggested by CPUC. maximum allowable interval this Reliability Standard. It contends
865. Accordingly, the Commission appropriate to the relay type and the that compliance should be
proposes to approve PRC–007–0 as potential impact on the Bulk-Power straightforward since transmission and
mandatory and enforceable. We believe System. distribution service providers are
that the proposed Reliability Standard is supposed to trip a certain amount of
just, reasonable, not unduly j. UFLS Performance Following an
load under specified under-frequency
Under Frequency Event (PRC–009–0)
discriminatory or preferential, and in conditions. Therefore, either the utility
the public interest. i. NERC Proposal tripped the required amount of load or
871. Proposed Reliability Standard it did not, perhaps with some
i. Under Frequency Load Shedding
PRC–009–0 ensures that the bandwidth.
Equipment Maintenance Programs
(PRC–008–0) performance of an UFLS system is iv. Commission Proposal
analyzed and documented following an
i. NERC Proposal under frequency event by requiring the 877. The Commission discusses ISO/
866. Proposed Reliability Standard transmission owner, transmission RTO Council’s comments on the general
PRC–008–0 requires transmission operator, load-serving entity and issue that regional Reliability Standards
owners and distribution providers to distribution provider to document their must be approved by the ERO and the
implement UFLS equipment operation in accordance with the Commission before they become
maintenance and testing programs and regional reliability organization’s effective above in the section on
provide program results to the regional program and to provide that Common Issues.
reliability organization. documentation to the regional reliability 878. The Commission does not find
organization and NERC upon their any material difference between
ii. Staff Preliminary Assessment CenterPoint’s suggestion to use a
request.
867. According to the Staff performance metric approach and the
Preliminary Assessment, PRC–008–0 ii. Staff Preliminary Assessment Requirements in this proposed
does not specify the criteria to 872. Staff noted that, although the Reliability Standard. We believe
determine appropriate maintenance proposed Reliability Standard contains performance metrics, especially leading
intervals or the maximum allowable the reporting requirement for operation metrics, are excellent complementary
interval to ensure effectiveness, as events for UFLS, there is no similar components in Reliability Standards
discussed in detail in the Staff reporting requirement for operation which enable further enhancement and
Preliminary Assessment section of this events for UVLS in the proposed effectiveness of these Reliability
rulemaking under PRC–005–1. No other Reliability Standards that are associated Standards.
substantive issues were identified for with UVLS programs. 879. With respect to TAPS’ concern
this proposed Reliability Standard. regarding the size of distribution
iii. Comments providers and load serving entities, the
iii. Comments 873. ReliabilityFirst supports the Commission discusses this issue in the
868. Commenter’s statements development of a companion UVLS Common Issues section of this NOPR.
regarding maximum allowable intervals Reliability Standard with reporting 880. The Commission believes that
for the performance of maintenance and requirements that are similar to this the proposal serves an important
testing programs have been presented in UFLS Reliability Standard. Likewise, purpose in ensuring that the
detail under the comments for PRC– NERC acknowledges the concerns of the performance of an UFLS system is
005–1. Staff Preliminary Assessment, noting analyzed and documented following an
the lack of a reporting requirement for under frequency event. Further the
iv. Commission Proposal operation events of UVLS and plans to proposed Requirements are sufficiently
869. The Commission notes that the address this omission in its work on the clear and objective to provide guidance
commenters generally share staff’s ‘‘fill-in-the-blank’’ proposed Reliability for compliance. Accordingly, the
concern that the proposed Reliability Standards that are associated with Commission proposes to approve PRC–
Standard does not specify the criteria to UVLS. 009–0 as mandatory and enforceable.
determine the appropriate maintenance 874. ISO/RTO Council states that, due We believe that the proposed Reliability
intervals, nor does it specify maximum to the fact that PRC–009–0 Standard is just, reasonable, not unduly
discriminatory or preferential, and in unreasonable and unnecessary to performance, the Commission believes
the public interest. require examination and documentation that the technical requirements should
of any and all UVLS trips. Further, it include an integrated and coordinated
k. Assessment of the Design and
states that producing unnecessary approach in Bulk-Power System
Effectiveness of UVLS Program (PRC–
Reliability Standards for utilities that protection, including the frequency
010–0) install UVLS schemes could have the response of the interconnection to load
i. NERC Proposal adverse effect of discouraging utilities and generation loss. Compliance
881. Proposed Reliability Standard that might benefit from UVLS by Measures should be definitive to ensure
PRC–010–0 requires transmission installing the schemes or, alternatively, these technical requirements are met.
owners, transmission operators, load- punishing the utilities that do so.
885. MEAG seeks a clarification in the 891. The Commission believes that
serving entities, and distribution Reliability Standard PRC–010–0 serves
providers to periodically conduct and specific instance where the transmission
owner owns and maintains a an important purpose in requiring the
document an assessment of the
transmission protection system, e.g., a periodical assessment of the
effectiveness of the UVLS program.290
UFLS or UVLS system, and where some effectiveness of a UVLS program.
This assessment shall be conducted
of the associated relays are designed to Further, the proposed Requirements are
with the associated transmission
trip a distribution breaker owned by a sufficiently clear and objective to
planner and planning authority.
customer. provide guidance for compliance.
ii. Staff Preliminary Assessment 886. ReliabilityFirst suggests an
integrated and coordinated approach to 892. Accordingly, giving due weight
882. The Staff Preliminary to the technical expertise of the ERO
Bulk-Power System protection, as
Assessment raised the concern that this and with the expectation that the
discussed above in the context of PRC–
proposed Reliability Standard on UVLS, Reliability Standard will accomplish the
006–0.
similar to PRC–006–0 on UFLS, is not purpose represented to the Commission
specific enough to address Blackout iv. Commission Proposal by the ERO and that it will improve the
Report Recommendation No. 21 887. The Commission commends the reliability of the nation’s Bulk-Power
concerning an integrated and initiative and efforts that have been System, the Commission proposes to
coordinated approach for the protection taken by NERC and industry in approve Reliability Standard PRC–010–
systems for generators, transmission addressing UVLS requirements as 0 as mandatory and enforceable. In
lines and UFLS and UVLS programs.291 recommended by the Blackout Report addition, pursuant to section 215(d)(5)
iii. Comments and expects to review these of the FPA and § 39.5(f) of our
improvements in the proposed regulations, the Commission proposes to
883. NERC states that it has made
Reliability Standards associated with direct that NERC submit a modification
progress in responding to Blackout
UVLS in their future revisions. to PRC–010–0 that requires that an
Recommendation No. 21 on the 888. The Commission believes that
Evaluation of Applicability of UVLS integrated and coordinated approach be
Reliability Standards of UVLS are
programs. The NERC Planning included in all protection systems on
required in the same manner as
Committee reviewed each regional Reliability Standards for line and the Bulk-Power System, including
reliability organization’s assessment of generation protection, UFLS or special generators and lines, generator’s low
the feasibility and benefits of installing protection systems since all of them are voltage ride-through capabilities, and
UVLS capability. In addition, the NERC required to ensure reliable system UFLS and UVLS programs.
Planning Committee has completed a operation. Therefore, we disagree with
report entitled, ‘‘Review of Regional l. Under Voltage Load Shedding System
CenterPoint’s view that UVLS Maintenance and Testing (PRC–011–0)
Evaluations of Under-voltage Load Reliability Standards are not necessary.
Shedding Capability in Response to 889. In response to a question raised i. NERC Proposal
NERC Blackout Recommendation by MEAG regarding the ownership of an
8b,’’ 292 with follow-up UFLS or UVLS installed by a 893. Proposed Reliability Standard
recommendations to be completed by transmission owner on a breaker owned PRC–011–0 requires transmission
the NERC Planning Committee and the by a customer, the transmission owner owners and distribution providers to
regions, along with an implementation remains the owner. The transmission implement their UVLS equipment
plan. NERC further states that the work owner or transmission operator can trip maintenance and testing program and
is ongoing under the supervision of the the breaker automatically or have a provide program results to regional
NERC Planning Committee and will delegated agreement with the customer reliability organization.
result in requests for new standards as to trip the breaker in case of an UFLS
the work is completed and suitable ii. Staff Preliminary Assessment
or UVLS event. The Commission
methods and criteria are developed. believes that the Reliability Standard 894. Staff expressed concern that
884. CenterPoint questions the need should be interpreted to achieve its PRC–011–0 does not specify the criteria
for this Reliability Standard and the reliability goal. This can be to determine the appropriate
other three Reliability Standards that accomplished by each entity performing
address other UVLS requirements,293 maintenance intervals or maximum
their required maintenance and allowable intervals for protection
while acknowledging that there is a operational activities or by one entity
significant need for UVLS for some systems to ensure effectiveness has been
doing the required activities. However, articulated in detail in the same section
systems. CenterPoint contends that it is the UFLS or UVLS system must be
in PRC–005–1.
290 At least every five years or as required by
maintained from the sensors that detect
the event to the actual opening of the iii. Comments
changes in system conditions.
291 Blackout Report at 159. circuit breaker.
292 Available at http://www.nerc.com/∼filez/ 890. In response to ReliabilityFirst’s 895. NERC indicates that it will
reports.html. suggestion to include additional consider maximum intervals; and ISO/
293 PRC–010–0, PRC–020–1 and PRC–021–1. definitive measures to meet system RTO Council and other commenters
agree with the Staff Preliminary other protection systems. Maintenance iii. Comments
Assessment.294 and testing programs must be developed
and special protection system 905. A number of commenters
iv. Commission Proposal discussed how the Commission should
misoperations must be analyzed and
896. PRC–011–0 does not specify the corrected. address PRC–012–0 and other fill-in-
criteria to determine the appropriate the-blank standards in the PRC group
maintenance intervals, nor does it ii. Staff Preliminary Assessment that require compliance by regional
specify maximum allowable reliability organizations.
900. Similar to its discussion of PRC–
maintenance intervals for the 906. ISO/RTO Council states that this
002–1, staff noted that Reliability
protections systems. The Commission Reliability Standard identifies only
Standard designates a regional
proposes that NERC include a
reliability organization as the sole categories rather than the detailed data
Requirement that maintenance and
applicable entity. useful for ensuring that a meaningful
testing of these UFLS programs must be
carried out within a maximum special protection system database is
iii. Comments
allowable interval that is appropriate to maintained.
the type of the relay used and the 901. A number of commenters 907. National Grid identifies this
impact of these UFLS on the reliability discussed how the Commission should Reliability Standard as one of those it
of the Bulk-Power System. address PRC–012–0 and other fill-in- refers to as ‘‘procedurally regional.’’
897. The Commission believes that the-blank standards in the PRC group That is, the requirement is set on a
Reliability Standard PRC–011–0 serves that require compliance by regional national level but is implemented
an important purpose in requiring reliability organizations.296 regionally. In the case of PRC–013–0, all
transmission owners and distribution iv. Commission Proposal relevant entities would be required to
providers to implement their UVLS provide information to databases
equipment maintenance and testing 902. Because the regional procedures established and maintained by some
programs. Further, the proposed have not been submitted to the regional body. National Grid explains
Requirements are sufficiently clear and Commission, it is not possible to that this is one example of a legitimate
objective to provide guidance for determine at this time whether PRC– ‘‘fill-in-the-blank’’ Reliability Standard.
compliance. 012–0 satisfies the statutory requirement
898. Accordingly, giving due weight that a proposed Reliability Standard be iv. Commission Proposal
to the technical expertise of the ERO ‘‘just, reasonable, not unduly
and with the expectation that the discriminatory or preferential, and in 908. The Commission believes that
Reliability Standard will accomplish the the public interest.’’ Accordingly, the the current Requirements and Measures
purpose represented to the Commission Commission will not propose to accept in the proposed Reliability Standard are
by the ERO and that it will improve the or remand this Reliability Standard adequate, and therefore, disagrees with
reliability of the nation’s Bulk-Power until the ERO submits additional ISO/RTO Council’s comments in this
System, the Commission proposes to information. In the interim, compliance regard. Requirement R1 includes three
approve Reliability Standard PRC–011– with PRC–012–0 should continue on its categories of data with each category
0 as mandatory and enforceable. In current basis, and the Commission providing a more detailed description of
addition, pursuant to section 215(d)(5) considers compliance with the required data. Measure M1 requires that
of the FPA and § 39.5(f) of our Reliability Standard to be a matter of each owner with a special protection
regulations, the Commission proposes to good utility practice. system must have the corresponding
direct that NERC submit a modification database as specified in the proposed
to PRC–011–0 that includes a n. Special Protection System Database
Reliability Standard.
requirement that maintenance and (PRC–013–0)
909. We agree with National Grid that
testing of UVLS programs must be i. NERC Proposal the database should be maintained on a
carried out within a maximum
allowable interval appropriate to the 903. Proposed Reliability Standard regional basis. However, Regional
applicable relay and the impact on the PRC–013–0 ensures that all special Entities have not undergone an approval
reliability of the Bulk-Power System. protection systems are properly process under section 215. Therefore,
designed, meet performance we cannot yet enforce this requirement.
m. Special Protection System Review requirements and are coordinated with 910. Because the regional procedures
Procedure (PRC–012–0) other protection systems by requiring have not been submitted to the
i. NERC Proposal the regional reliability organization to Commission, it is not possible to
899. Proposed Reliability Standard maintain a database of pertinent determine at this time whether PRC–
PRC–012–0 requires regional reliability information on special protection 013–0 satisfies the statutory requirement
organizations to ensure that all special systems. that a proposed Reliability Standard be
protection systems 295 are properly ii. Staff Preliminary Assessment ‘‘just, reasonable, not unduly
designed, meet performance discriminatory or preferential, and in
requirements and are coordinated with 904. Similar to its discussion of PRC– the public interest.’’ Accordingly, the
002–1, staff noted that this Reliability Commission will not propose to accept
294 While commenters raise these concerns Standard designates a regional or remand this Reliability Standard
primarily in the context of PRC–005–1, their reliability organization as the sole until the ERO submits additional
comments apply to PRC–011–0 as well.

295 A special protection system is a unique system
applicable entity. information. In the interim, compliance
designed to automatically take corrective actions to with PRC–013–0 should continue on its
protect the system under abnormal or 296 296 CPUC, FRCC, National Grid, NPCC,
current basis, and the Commission
predetermined conditions, excluding the NYSRC, ReliabilityFirst, Southern and TANC. Their considers compliance with the
coordinated tripping of circuit breakers to isolate comments also apply to PRC–003–1, PRC–006–0,
faulted components, which is typically the purpose PRC–012–0, PRC–013–0; PRC–014–0 and PRC–020– Reliability Standard to be a matter of
of other protection devices. 1. good utility practice.
o. Special Protection System provide documentation for existing, and the type of corrective actions
Assessment (PRC–014–0) new, or functionally modified special required to avoid misoperations.
i. NERC Proposal protection systems. However, we agree that reports on
special protection system misoperations
911. Proposed Reliability Standard ii. Staff Preliminary Assessment
should be routinely provided to the
PRC–014–0 ensures that special 917. No substantive issues were regional reliability organization and
protection systems are properly identified for the proposed Reliability NERC and propose to require NERC to
designed, meet performance Standard. provide that routine reporting be limited
requirements, and are coordinated with to misoperations of special protection
other protection systems by requiring iii. Comments
systems that have Interconnection-wide
the regional reliability organization to 918. The ISO/RTO Council believes reliable impact and routine submission
assess and document the operation, that the time period used for assessing of the corrective action plans upon
coordination, compliance with NERC compliance is not clear in this implementation instead of the current
Reliability Standards, as well as the Reliability Standard. requirement of 90 days upon request.
effectiveness of special protection
iv. Commission Proposal 926. Accordingly, giving due weight
systems, at least once every five years.
919. The Commission believes that to the technical expertise of the ERO
ii. Staff Preliminary Assessment there are no substantive issues and with the expectation that the
912. Similar to its discussion of PRC– identified for this proposed Reliability Reliability Standard will accomplish the
002–1, staff noted that this Reliability Standard. purpose represented to the Commission
Standard designates a regional 920. We disagree with ISO/RTO by the ERO and that it will improve the
reliability organization as the sole Council’s view that the compliance time reliability of the nation’s Bulk-Power
applicable entity. period is not clear. Requirement 3 of System, the Commission proposes to
913. The Staff Preliminary this Reliability Standard requires approve Reliability Standard PRC–016–
Assessment noted that the maximum documentation to be provided within 30 0 as mandatory and enforceable. In
allowable interval of at least once every days for compliance requirements. addition, pursuant to section 215(d)(5)
five years as a Requirement for assessing 921. Accordingly, the Commission of the FPA and § 39.5(f) of our
the effectiveness of the special proposes to approve PRC–015–0 as regulations, the Commission proposes to
protection systems is a good example of mandatory and enforceable. We believe direct that NERC submit a modification
a maximum allowable interval without that the proposed Reliability Standard is to PRC–016–0 that includes a
specific justification. just, reasonable, not unduly requirement that maintenance and
discriminatory or preferential, and in testing of these special protection
iii. Comments
the public interest. system programs must be carried out
914. A number of commenters within a maximum allowable interval
discussed how the Commission should q. Special Protection System
Misoperations (PRC–016–0) that is appropriate for the type of
address PRC–012–0 and other fill-in- relaying used and the impact of these
the-blank standards in the PRC group i. NERC Proposal special system protection programs on
that require compliance by regional 922. Proposed Reliability Standard the reliability of the Bulk-Power System.
reliability organizations. PRC–016–0 requires transmission
owners, generator owners and r. Special Protection System
distribution providers to provide the Maintenance and Testing (PRC–017–0)
915. Because the regional procedures
have not been submitted to the regional reliability organization with i. NERC Proposal
Commission, it is not possible to documentation, analyses and corrective
action plans for misoperation of special 927. Proposed Reliability Standard
determine at this time whether PRC– PRC–017–0 requires transmission
014–0 satisfies the statutory requirement protection systems.
owners, generator owners, and
that a proposed Reliability Standard be ii. Staff Preliminary Assessment distribution providers to provide the
‘‘just, reasonable, not unduly
923. No substantive issues were regional reliability organization with
identified for the proposed Reliability documentation on special protection
the public interest.’’ Accordingly, the
Standard. system maintenance, testing and
implementation plans.
or remand this Reliability Standard iii. Comments
until the ERO submits the regional 924. ISO/RTO Council is concerned ii. Staff Preliminary Assessment
procedures or a single continent-wide that this Reliability Standard fails to
procedure. In the interim, compliance 928. Staff expressed concern that this
identify the analysis sufficient for
with PRC–014–0 should continue on its Reliability Standard does not specify the
reviewing special protection system
current basis, and the Commission criteria to determine the appropriate
operations and the type of corrective
considers compliance with the maintenance intervals or maximum
action that must be taken to avoid
Reliability Standard to be a matter of allowable intervals for protection
misoperations. It also believes that
good utility practice. systems to ensure effectiveness.
reports on special protection system
p. Special Protection System Data and misoperations should be routinely iii. Comments
Documentation (PRC–015–0) provided to the regional reliability
organization and NERC. 929. The comments provided by ISO/
i. NERC Proposal RTO Council and NERC regarding

916. Proposed Reliability Standard iv. Commission Proposal maximum allowable intervals in
PRC–015–0 requires transmission 925. We disagree with ISO/RTO carrying out maintenance and testing
owners, generator owners, and Council that PRC–016–0 does not programs in the PRC Reliability
distribution providers to maintain a identify the analysis sufficient for Standards have been presented in detail
listing, retain evidence of review, and reviewing special protection systems in PRC–005–1.
iv. Commission Proposal 28 by requiring the transmission owner with PRC–020–1 should continue on its
930. PRC–017–0 does not specify the and generator owner to install current basis, and the Commission
criteria to determine the appropriate disturbance monitoring equipment and considers compliance with the
maintenance intervals, nor does it report disturbance data. The Reliability Standard to be a matter of
specify maximum allowable Commission commends the initiative good utility practice.
maintenance intervals for the and efforts taken by NERC and industry
u. Under-Voltage Load Shedding
protections systems. The Commission in addressing this recommendation.
936. Accordingly, the Commission Program Data (PRC–021–1)
proposes to require NERC to include a
proposes to approve PRC–018–1 as i. NERC Proposal
requirement that maintenance and
mandatory and enforceable. We believe 942. Proposed Reliability Standard
testing of these special protection
that the proposed Reliability Standard is PRC–021–1 ensures that data is
system programs must be carried out
just, reasonable, not unduly supplied to support the regional UVLS
within a maximum allowable interval discriminatory or preferential, and in
that is appropriate to the type of database by requiring the transmission
the public interest. owner and distribution provider to
relaying used and the impact of these
special protection system programs on t. Under-Voltage Load Shedding supply data related to its system and
the reliability of the Bulk-Power System. Program Database (PRC–020–1) other related protection schemes to its
931. Accordingly, giving due weight regional reliability organization’s data
i. NERC Proposal
to the technical expertise of the ERO base.
and with the expectation that the 937. Proposed Reliability Standard
PRC–020–1 ensures that a regional ii. Staff Preliminary Assessment
Reliability Standard will accomplish the
purpose represented to the Commission database for UVLS programs is available 943. No substantive issues were
by the ERO and that it will improve the for Bulk-Power System studies by identified for the proposed Reliability
reliability of the nation’s Bulk-Power requiring regional reliability Standard PRC–021–1.
System, the Commission proposes to organizations with any entities that have
UVLS programs to maintain and iii. Comments
approve Reliability Standard PRC–017–
annually update a database. 944. CenterPoint seems to promote
eliminating this Reliability Standard as
addition, pursuant to section 215(d)(5) ii. Staff Preliminary Assessment stated previously in PRC–010–0.
of the FPA and § 39.5(f) of our 938. Staff noted that this version 1
regulations, the Commission proposes to Reliability Standard was recently iv. Commission Proposal
direct that NERC submit a modification approved by the NERC Board of 945. The Commission believes that
to PRC–017–0 that: (1) Includes a Trustees, effective May 1, 2006, and Reliability Standards for UVLS are
requirement that maintenance and does not address the applicability required in the same manner as
testing of these special protection concerns articulated in the Staff Reliability Standards for line and
system programs must be carried out Preliminary Assessment. generation protection, UFLS or special
within a maximum allowable interval 939. In addition, similar to its protection systems since all of them are
that is appropriate to the type of discussion of PRC–002–1, staff noted required to ensure reliable system
relaying used; and (2) identifies the that this Reliability Standard designates operations. Therefore, we disagree with
impact of these special protection a regional reliability organization as the CenterPoint’s view that UVLS
system programs on the reliability of the sole applicable entity. Staff was Reliability Standards are not needed.
Bulk-Power System. concerned about the feasibility of a 946. The Commission proposes to
s. Disturbance Monitoring Equipment regional reliability organization serving approve, as mandatory and enforceable,
Installation and Data Reporting (PRC– as the applicable entity and the Reliability Standard PRC–021–1 as just,
018–1) enforceability of the proposed reasonable, not unduly discriminatory
Reliability Standard in the mandatory or preferential, and in the public
i. NERC Proposal Reliability Standards structure. interest.
932. Proposed Reliability Standard v. Under-Voltage Load Shedding
iii. Comments
PRC–018–1 ensures that disturbance Program Performance (PRC–022–1)
monitoring equipment is installed and 940. A number of commenters
disturbance data is reported in discussed how the Commission should i. NERC Proposal
accordance with comprehensive address PRC–020–0 and other fill-in- 947. Proposed Reliability Standard
requirements for installing disturbance the-blank standards in the PRC group PRC–022–1 requires transmission
monitoring equipment. that require compliance by regional operators, load-serving entities, and
reliability organizations. distribution providers to provide
iv. Commission Proposal analysis, documentation on UVLS
933. This is a new Reliability operations and misoperations to the
Standard and it was not assessed in the 941. Because the regional procedures
regional reliability organization.
Staff Preliminary Assessment. have not been submitted to the
Commission, it is not possible to ii. Staff Preliminary Assessment
iii. Comments determine at this time whether PRC– 948. No substantive issues were
934. Because this Reliability Standard 020–1 satisfies the statutory requirement identified regarding Reliability Standard
was not discussed in the Staff that a proposed Reliability Standard be PRC–022–1.
Preliminary Assessment, no comments ‘‘just, reasonable, not unduly
have been filed. discriminatory or preferential, and in iii. Comments

the public interest.’’ Accordingly, the 949. No comments were filed.
iv. Commission Proposal Commission will not propose to accept
935. The Commission notes that the or remand this Reliability Standard iv. Commission Proposal
proposed Reliability Standard addressed until the ERO submits additional 950. The Commission believes that
Blackout Report Recommendation No. information. In the interim, compliance there are no substantive issues for this
proposed Reliability Standard. ii. Staff Preliminary Assessment and utilize a formal agreement to
Therefore, the Commission proposes to 953. The Staff Preliminary determine the response of a distribution
approve, as mandatory and enforceable, Assessment did not identify any provider or load serving entity to a
Reliability Standard PRC–022–1 as just, substantive issues regarding TOP–001– system emergency. As set forth in
reasonable, not unduly discriminatory 0, other than noting that it does not Requirement R1, each transmission
or preferential, and in the public contain Measures or Levels of Non- operator must have the responsibility
interest. Compliance. and corresponding decision-making
authority to take ‘‘whatever actions are
11. TOP: Transmission Operations iii. Comments needed’’ to ensure reliability in an
a. Overview 954. MEAG states that, under emergency. This includes the
Requirement R2 a transmission operator curtailment of transmission service and
951. The eight proposed Transmission must take immediate actions to shed load shedding. Eliminating the general
Operations (TOP) Reliability Standards load to alleviate an emergency, and obligation set forth in Requirement R4
apply to transmission operators, Requirement R4 obligates distribution that a distribution provider or load
generator operators and balancing providers and load-serving entities to do serving entity must ‘‘comply with all
authorities. The goal of these Reliability the same. MEAG contends that reliability directives of the transmission
Standards is to ensure that the Requirement R4 should be eliminated operator * * * unless such action
transmission system is operated within because, to the extent that a would violate safety, equipment,
operating limits. Specifically, these transmission owner relies on a regulatory or statutory requirements,’’
Reliability Standards cover the distribution provider or load serving and replacing it with formal agreements
responsibilities and decision-making entity to respond to a system would result not only in regional
emergency, including load shedding, differences but differences in the ability
authority for reliable operations,
this should be done through a formal of a transmission operator to respond to
requirements for operations planning,
agreement with specific protocols that an emergency on a system-by-system
planned outage coordination, real-time and contract-by-contract basis. Rather
operations, provision of operating data, all parties have agreed to follow. MEAG
states that, as long as Requirement R4 is than enhancing reliability, we believe
monitoring of system conditions, that such latitude could result in the
reporting of operating limit violations included in the Reliability Standard, an
entity may make faulty assumptions deterioration of Bulk-Power System
and actions to mitigate such violations. reliability.
The Interconnection Reliability about the emergency response of
another entity. 959. MRO claims that Requirements
Operations and Coordination (IRO) R7.1, R7.2, and R7.3 appear to be
955. MRO states that Requirements
group of Reliability Standards instructions rather than requirements.
7.1, 7.2, and 7.3, which relate to
complement these proposed TOP coordination when a generation or Requirement R7 provides that each
Reliability Standards. transmission facility is removed from transmission operator and generator
service, appear to be instructions rather operator shall not remove facilities from
b. Reliability Responsibilities and service if removing those facilities
Authorities (TOP–001–0) than requirements. It asks the
Commission to revise or remove these would burden a neighboring system
i. NERC Proposal Requirements. unless certain events occur that are
delineated in Requirements R7.1, R7.2
952. TOP–001–0 requires that: (a) The iv. Commission Proposal and R7.3. While MRO does not explain
transmission operating personnel must 956. The Commission proposes to what it considers to be the difference
have the authority to direct actions in approve TOP–001–0 as mandatory and between an instruction and a
real-time; (b) the transmission operator, enforceable. In addition, we propose to requirement, we interpret that, read
balancing authority, and generator direct that NERC develop modifications together as a whole Requirement R7
operator must follow the directives of to the Reliability Standard, as discussed articulates binding obligations on a
their reliability coordinator; and (c) the below. transmission operator and is properly
balancing authority and generator 957. Requirement R1 of TOP–001–0 characterized as a requirement.
operator must follow the directives of states that a transmission operator must 960. As mentioned above, TOP–001–
the transmission operator. In addition, have the responsibility and clear 0 does not contain Measures or Levels
the proposed Reliability Standard decision-making authority ‘‘to take of Non-Compliance. However, we
requires the transmission operator, whatever actions are needed to ensure believe that the Requirements set forth
balancing authority, generator operator, the reliability of its area.’’ Neither the in TOP–001–0 are sufficiently clear and
distribution provider and load-serving Reliability Standard nor the NERC objective to provide guidance for
glossary explains what is meant by a compliance. Moreover, TOP–001–0
entity to take emergency actions when
transmission operator’s ‘‘area.’’ We serves the vital purpose of ensuring that
directed to do so in order to keep the
interpret the term to mean the area in transmission operators and others have
transmission system intact. The clear decision-making authority to take
reliability goal of TOP–001–1 is to: (1) which the transmission facilities under
the transmission operator’s control are appropriate actions or direct the actions
Ensure that system operators have the of others to return the transmission
authority to take actions and direct located.297
958. We are not persuaded by MEAG’s system to normal conditions during an
others to take action to maintain Bulk- emergency.
Power System facilities within limits; suggestion to eliminate Requirement R4
(2) protect transmission, generation, to the technical expertise of the ERO
297 We note that NERC’s reliability functional

distribution, and customer equipment; model (Function Definitions and Responsible and with the expectation that the
and (3) prevent cascading failures of the Entities, version 2, approved by the Board of Reliability Standard will accomplish the
interconnected grid. Further, NERC Trustees Feb. 10, 2004) defines Reliability purpose represented to the Commission
Authority Area, Balancing Authority Area,
indicates that it plans to modify TOP– Transmission Planning Area, and Planning
by the ERO and that it will improve the
001–0 to address the lack of Measures Authority Area, but does not define Transmission reliability of the nation’s Bulk-Power
and Levels of Non-Compliance. Operator Area. System, the Commission proposes to
approve Reliability Standard TOP–001– allows it to be returned to a stable state develop operating strategies.
0 as mandatory and enforceable. In within 30 minutes after a contingency Appropriate real-time control actions
addition, pursuant to section 215(d)(5) occurs with the capacity to withstand may diverge from those identified by a
of the FPA and § 39.5(f) of our another contingency without transmission operator’s previous-day
regulations, the Commission proposes to cascading.300 In contrast, the Reliability studies, and therefore, according to
direct that NERC submit a modification Standard does not require the next-day NERC, the Reliability Standard does not
to TOP–001–0 that includes Measures planning analysis to identify control identify control actions to be followed
and Levels of Non-Compliance. actions that are needed to bring the by the operators. Similarly, NERC states
system back to a stable state within 30 that it is impractical to identify and
c. Normal Operations Planning (TOP– minutes after a contingency occurs with study all possibilities in next-day
002–1) the capacity to withstand another analysis.
i. NERC Proposal contingency without cascading.301 The 968. Regarding staff’s concern
Staff Preliminary Assessment noted that regarding the lack of analysis of
962. TOP–002–1 requires
this may present a potential multiple system elements, NERC
transmission operators and balancing
vulnerability as operators may not be responds that Requirement R6 instructs
authorities to look ahead to the next
aware of available control actions or each balancing authority and
hour, day and season, and have
may not have control actions, other than transmission operator to meet NERC,
operating plans ready to meet any
firm load shedding, available to adjust regional reliability organization,
unscheduled changes in system
the system after a first contingency subregional and local reliability
configuration and generation dispatch. requirements. Thus, the Reliability
occurs.
The proposed Reliability Standard 965. The Staff Preliminary Standard recognizes that some
covers a broad array of matters, Assessment also pointed out a potential situations require operating in a manner
including: (1) Procedures to mitigate gap in the analysis of and planning for that provides protection against the
System Operating Limit (SOL) and contingencies. This Reliability Standard failure of multiple system elements.
Interconnection Reliability Operating refers to a ‘‘single contingency’’ and is However, NERC adds that it will review
Limit (IROL) violations; (2) verification defined as the loss of a transformer, Requirement R7 to ensure that reserves
of real and reactive reserve capabilities; transmission circuit, single DC pole or can be deployed to meet the
(3) communications; (4) modeling; (5) generator, but does not include the requirements of the disturbance control
information exchange; and (6) data assessment of outages of multiple Reliability Standard, BAL–002–0.
confidentiality restrictions. The goal of elements that would be removed from 969. MidAmerican and MRO point
TOP–002–1 is to ensure that resources service as a result of a single component out that the availability for the sale of
and operational plans are in place to failure.302 Thus, the loss of a single short-term firm transmission service is
enable system operators to maintain the relay, breaker, control system based on calculations taking into
Bulk-Power System in a reliable state. component or transmission tower may account single element events. Any
Further, NERC indicates that it plans to affect multiple system elements. effort to define single contingencies in
modify the Reliability Standard to However, these circumstances are not terms of multiple elements will result in
address the lack of Measures and Levels required to be considered in the analysis a significant decrease in available
of Non-Compliance. of, and planning for, contingencies. transmission capability; resulting in a
963. Two Requirements of particular 966. Finally, the Staff Preliminary negative impact on competition in the
note are R7 and R14. Requirement R7 of Assessment stated that, although wholesale market. MRO also maintains
TOP–002–1 provides that each Requirement R14 of the Reliability that technology does not allow for
balancing authority shall plan to meet Standard recognizes the need to comprehensive assessment of outages of
capacity and energy reserve communicate changes in generator ‘‘real multiple elements due to a single
requirements, including being able to and reactive capability as well as the component failure.
deliver power in the case of any single status of automatic voltage regulators,’’ 970. Regarding the Staff Preliminary
contingency. Requirement R14 directs it does not include a similar Assessment’s statement that the status
each generator operator to notify its requirement to communicate changes in of power system stabilizers should be
balancing authority and transmission the status of power system stabilizers. communicated in TOP–002–0, NERC
operator of changes in: (1) real and notes that this is covered by a separate
reactive power output capabilities.298 iii. Comments
Reliability Standard, VAR–001–0, under
967. NERC states that, contrary to the Requirements R4 and R9.
ii. Staff Preliminary Assessment Staff Preliminary Assessment, 971. Requirements R3 and R4 provide
964. The Staff Preliminary Requirement R11 of the Reliability that each load serving entity and
Assessment noted that Requirement R7 Standard does require next-day studies. generator operator shall coordinate its
specifies that capacity and energy NERC further states that next-day operations with its balancing authority
reserves must be deliverable to local analysis should not have to identify and transmission service provider,
areas in case of a single contingency.299 control actions. Rather, it is intended to ‘‘where confidentiality agreements
Other Reliability Standards require that provide a look into the next day so that allow.’’ Alcoa objects to this phrase,
the system operate in a manner that the transmission operator can then contending that a load serving entity or
generator operator may evade these
298 On August 28, 2006, NERC submitted TOP– 300 See proposed Reliability Standard IRO–005–1. coordination requirements by simply
002–1 for approval, which replaces TOP–002–0. 301 System operators should operate the Bulk-
TOP–002–1 simply deletes the Requirement R14.2, Power System such that firm load will continue to not executing a confidentiality
agreement.
which required automatic voltage regulators. be supplied after a contingency. The operations
According to NERC, the deleted requirement is now planning function should provide the system
included in the recently revised VAR–001–1 and is operators with information (control actions) iv. Commission Proposal
therefore unnecessary in TOP–002–1. concerning what actions may be needed to avoid 972. The Commission proposes to
299 Although the Staff Preliminary Assessment cascading after the worst contingency has occurred.
addresses concerns regarding the TOP–002–0, many 302 Failure of an electrical component includes approve TOP–002–1 as mandatory and
of these same concerns apply to TOP–002–1 as relay and control system failures, which may enforceable. In addition, we propose to
well. remove more than one element. direct that NERC develop modifications
to the Reliability Standard, as discussed in VAR–001–0, which requires that each the issue separately to ensure that
below. generator operator provide information necessary protections are in place
973. While Requirement R11 requires to its transmission operator on the status related to confidential information; and
next day studies, as mentioned above, of generation reactive power resources (3) requires the next-day analysis for all
TOP–002–1 does not require the next- including the status of power system IROLs to identify and communicate
day planning analysis to identify control stabilizers. We agree with NERC and do control actions to system operators that
actions that are needed to bring the not propose any changes in this regard. can be implemented within 30 minutes
system back to a stable state within 30 976. We share Alcoa’s concern following a contingency to return the
minutes after a contingency occurs with regarding the possible interference with system to a reliable operating state and
the capacity to withstand another the coordination demanded in prevent cascading outages.
contingency without cascading. Requirements R3 and R4 if that 979. Regarding outages of multiple
Operators should have at their disposal coordination is dependent upon the elements caused by the failure of single
and be aware of control actions to adjust execution of a confidentiality element, NERC comments that it will
the Bulk-Power System within 30 agreement. Generally, the effectiveness review the Requirement R7 to ensure
minutes to avoid cascading after the of a Reliability Standard should not be that reserves can be deployed to meet its
worst contingency has occurred. Such predicated upon the existence of a disturbance control Reliability
control actions include reconfiguring confidentiality agreement or any other Standard, BAL–002–0. However,
the transmission system, recalling private agreement. If some Reliability MidAmerican and MRO assert that any
facilities from planned outages, and Standards require a confidentiality effort to define single contingencies in
ensuring availability of generation and agreement, the Commission believes terms of multiple elements will result in
reactive power resources. These control that the matter should be addressed a significant decrease in available
actions should be determined as part of separately and globally so that it applies transmission capability (ATC) and will,
day ahead operations planning. While to all Reliability Standards rather than therefore, have a negative impact on
NERC suggests that it would be designating that a specific requirement competition in the wholesale market. As
impractical to study every possibility to is subject to existence of a discussed in the TPL Chapter, the
identify control actions, we believe that confidentiality agreement. Accordingly, simulations used for either planning or
in fact only a limited number of critical we propose to direct that NERC modify calculating available transmission
facilities associated with IROLs would Requirements R3 and R4 by deleting capability must be consistent with the
require analysis to identify control references to confidentiality agreements. number of elements that will be
actions aimed at avoiding cascading Rather, NERC should address the issue removed from service in the physical
outages. Accordingly, we propose separately to ensure that necessary system.
directing that NERC modify TOP–002– protections are in place related to
1 to include identification of control confidential information. d. Planned Outage Coordination (TOP–
actions that can be implemented within 977. While we have identified 003–0)
30 minutes as a part of the next-day concerns with regard to TOP–002–1, we i. NERC Proposal
analysis and communication of these believe that the proposed Reliability
control actions to system operators. Standard serves an important purpose 980. TOP–003–0 requires
974. NERC’s glossary defines in ensuring that resources and transmission operators, generator
‘‘contingency’’ as ‘‘the unexpected operational plans are in place to enable operators and balancing authorities to
failure or outage of a system component, system operators to maintain the Bulk- coordinate transmission and generator
such as a generator, transmission line, Power System in a reliable state. As maintenance schedules. Where a
circuit breaker, switch or other electric mentioned above, TOP–002–1 does not conflict in maintenance schedule arises,
element.’’ 303 Requirement R7 of TOP– contain Measures or Levels of Non- the reliability coordinator is authorized
002–1 requires that each balancing Compliance. The Commission believes to resolve the conflict.
authority plan to meet capacity and that it is important for NERC to provide ii. Staff Preliminary Assessment
energy reserve requirements, including Measures and Levels of Non-
deliverability/capability for any single Compliance. Nonetheless, the 981. TOP–003–0 requires that each
contingency.304 Although the NERC Requirements set forth in TOP–002–1 transmission provider must provide
glossary defines ‘‘contingency,’’ we are are sufficiently clear and objective to outage information on transmission
concerned that the phrase ‘‘single provide guidance for compliance. lines and transformers greater than 100
contingency’’ is open to interpretation 978. Accordingly, giving due weight kV and each generator operator must
and that deliverability is not defined. to the technical expertise of the ERO provide outage information for
The Commission proposes to interpret and with the expectation that the generators greater than 50 MW. The
contingency as discussed in the Reliability Standard will accomplish the Staff Preliminary Assessment observed
transmission planning chapter and to purpose represented to the Commission that these Requirements assume that
interpret deliverability as the ability to by the ERO and that it will improve the only systems greater than 100 kV or
deliver the output from generation reliability of the nation’s Bulk-Power generators above 50 MW will affect the
resources to firm load without any System, the Commission proposes to reliability of interconnected operations.
reliability criteria violations for approve Reliability Standard TOP–002– Staff stated that, although this
plausible generation dispatches. 1 as mandatory and enforceable. In assumption may be true in most
975. The Staff Preliminary addition, pursuant to section 215(d)(5) instances, a justification should be
Assessment suggested that TOP–002–0 of the FPA and § 39.5(f) of our provided for the threshold of 100 kV for
should include a requirement to regulations, the Commission proposes to transmission and 50 MW for generation
communicate a change in the status of direct that NERC submit a modification outages. Staff further stated that the loss
power system stabilizers. In response, to TOP–002–1 that: (1) Includes of transmission lines or transformers
NERC comments that this is addressed Measures and Levels of Non- less than 100 kV and generators less
compliance; (2) deletes references to than 50 MW may affect system stability
303 NERC glossary at 3. confidentiality agreements in in load pockets or remote sections of the
304 See R7 of TOP–002–0. Requirements R3 and R4, but addresses grid depending upon system conditions.
982. The Staff Preliminary iv. Commission Proposal on the operation of Bulk-Power System
Assessment noted that, while a related 986. The Commission notes that subject to Requirement R1 for planned
Reliability Standard, TOP–002–0, outage information is important to both outage coordination.
requires the coordination of planned reliable operation and to the calculation e. Transmission Operations (TOP–004–
outages on a current-day, next-day and of available transfer capability. This 0)
seasonal basis for normal operations information is also needed to assure
planning, TOP–003–0 only requires i. NERC Proposal
coordination of outages long before next
next-day reporting for planned outages day or current day operations. The 989. TOP–004–0 requires
and does not include longer range Commission proposed that applicable transmission operators to operate the
planning. The Staff Preliminary scheduled outages be communicated to transmission system within SOL and
Assessment expressed the concern that impacted transmission operators and IROL. The ‘‘N–1’’ operating criterion for
this gap may affect reliability because reliability coordinators with sufficient the transmission system is also
proper assessment of the system and lead time to coordinate outages. The established in this Reliability Standard.
coordination between generation and Commission requests industry input on It provides that operating configurations
transmission outages may not occur. what constitutes sufficient lead time for for which limits have not yet been
Moreover, the lack of information may planned outages. determined should be treated as
also have an impact on TTC/ATC 987. NERC, Allegheny, ISO/RTO emergencies. The reliability goal of
calculations. Staff also noted that the Council, and ReliabilityFirst agree with TOP–004–0 is to maintain Bulk-Power
Levels of Non-Compliance are based on the Staff Preliminary Assessment that System facilities within limits, thereby
designating a process for providing the thresholds for providing outage protecting transmission, generation,
information, but they do not contain information should be reviewed. While distribution and customer equipment
requirements for the actual provision of we agree with commenters that lowering and preventing cascading failures of the
that information the threshold might slow down the interconnected grid. Further, NERC
coordination process, we are also indicates that it plans to modify TOP–
iii. Comments 004–0 to address the lack of Measures
concerned that the thresholds of 100 kV
and 50 MW may not include all and Levels of Non-Compliance.
983. NERC comments that the 100 kV
and 50 MW thresholds may need to be facilities that have a significant impact ii. Staff Preliminary Assessment
reviewed over time. However, NERC on the operation of Bulk-Power System.
believes that the Commission should For example, emergency operations
Assessment noted that a regional review
approve TOP–003–0 as proposed would require, at a minimum, that there
of the potential impact of multiple
because transmission operators, are adequate blackstart resources
outages in day-ahead operations
balancing authorities and reliability available if needed. Thus, while in the
planning is included in Requirement R3
coordinators should decide which longer-term a review of the existing
for TOP–004–0. However, staff observed
facilities to include in their operations thresholds is appropriate, at this time, that the conditions under which
planning assessments. we propose directing NERC to modify multiple outages can occur remain
TOP–003–0, Requirement R1 to provide undefined.
984. Allegheny agrees that the 100 kV that a generator operator or transmission
and 50 MW thresholds may not be 991. The proposed Reliability
operator must provide planned outage Standard requires the operation of the
appropriate in all situations. However, information for any facility above 100
Allegheny points out that transmission system within IROL and SOL. When the
kV and 50 MW and any other facility system enters an unknown state (i.e.,
operators and reliability coordinators below these thresholds that, in the
typically coordinate all planned outages any state for which operating limits
opinion of the transmission operator, have not been determined),
that may have a significant impact on balancing authority, or reliability
interconnected operations. Rather than Requirement R4 instructs the operator to
coordinator, would have a direct impact ‘‘restore operations to respect proven
lowering the thresholds to include all on the operation of Bulk-Power System.
facilities, Allegheny suggests that reliable power system limits within 30
988. Accordingly, giving due weight minutes.’’ Staff cautioned that the
transmission operators and reliability to the technical expertise of the ERO
coordinators identify significant phrase ‘‘within 30 minutes’’ could be
and with the expectation that the interpreted as a grace period. However,
facilities through system studies. Reliability Standard will accomplish the
MidAmerican and MRO recommend such an interpretation may not be
purpose represented to the Commission consistent with the intent that, while 30
that the thresholds should not be by the ERO and that it will improve the
lowered because this will slow down minutes has been adopted by the
reliability of the nation’s Bulk-Power industry as a reasonable time period, it
the coordination of outages for higher System, the Commission proposes to
voltage facilities and larger generators. is expected that corrective actions will
approve Reliability Standard TOP–003– be taken as soon as possible and without
985. ISO/RTO Council believes that 0 as mandatory and enforceable. In delay.
any size or voltage threshold must be addition, pursuant to section 215(d)(5)
justified based on its potential impact to of the FPA and § 39.5(f) of our iii. Comments
reliability. In addressing lower voltage regulations, the Commission proposes to 992. NERC responds to the Staff
levels, ReliabilityFirst comments that direct that NERC submit a modification Preliminary Assessment, stating that the
system operators typically evaluate and to TOP–003–0 that: (1) Includes a specification of 30 minutes is not meant
monitor lower voltages levels to ensure requirement to communicate scheduled to suggest that system operators should
they do not impact the reliability of the outages well in advance to ensure take as long as 30 minutes. Rather, it is
Bulk Electric System. However, reliability and accuracy of ATC meant to provide system operators with
ReliabilityFirst believes that the calculation; and (2) makes any facility the flexibility to respond to emergencies
assessment and monitoring of these below the thresholds that, in the in the manner they determine is best,
lower voltage levels should be included opinion of the transmission operator, even if it is not the fastest alternative.
in the Reliability Standard for balancing authority, or reliability In addition, NERC asserts that: (1) 30
uniformity and consistency. coordinator, will have a direct impact minutes is based on decades of system
operations experience; (2) system to respect multiple outages as specified f. Operational Reliability Information
operators do not treat ‘‘within 30 by the regional reliability organization (TOP–005–1)
minutes’’ as a grace period and it has policy it does not define conditions i. NERC Proposal
not come across situations when system under which such multiple outages
operators waited for 29 minutes before must be considered. We interpret such 1000. TOP–005–1 ensures that
taking an appropriate action; and (3) conditions to include high risk reliability information is shared among
although a system is not allowed to drift conditions such as hurricanes, ice reliability coordinators, transmission
in and out of a secure state, sometimes storms or periods of high solar magnetic operators and balancing authorities.306
it enters an unknown state that was not disturbances during which the It requires the transmission operator and
studied and it is appropriate to allow probability of a multiple outage the balancing authority to provide
the system operators a reasonable approaches that of single element operating data to each other and to the
amount of time to bring the system back outage. The Commission proposes that reliability coordinator and provides a
to the normal state. Requirement R3 be modified to define list of typical operating data that must
993. MidAmerican comments that, if conditions under which the system be provided. TOP–005–1 also provides
IROL cannot be exceeded even for one must be operated to respect multiple that, as a condition of receiving data
minute, operators will need to maintain outages. from the NERC’s Interregional Security
a margin at significant cost and there 998. The Commission notes that TOP– Network,307 each data recipient must
will be a resulting negative impact on 004–0 does not contain Measures or execute a confidentiality agreement.
competition. Levels of Non-Compliance. TOP–004–0 ii. Staff Preliminary Assessment
serves an important reliability goal of
iv. Commission Proposal ensuring that the Bulk-Power System 1001. Staff noted that Attachment 1 of
facilities are operated within safe limits, TOP–005–1 entitled, ‘‘Electric System
994. The Commission proposes to Reliability Data,’’ which specifies the
approve TOP–004–0 as mandatory and thereby protecting transmission,
generation, distribution and customer types of operating data that reliability
enforceable. In addition, we propose to coordinators, balancing authorities and
direct that NERC develop modifications equipment and preventing cascading
failures. The Commission believes that transmission operators are expected to
to the Reliability Standard as discussed share, does not include the operational
below. it is important for NERC to provide
Measures and Levels of Non- status of special protection systems and
995. Requirement R4 of TOP–004–0 power system stabilizers. The Staff
provides that, if a transmission operator Compliance elements for this proposed
Reliability Standard. Nonetheless, the Preliminary Assessment raised the
enters an unknown state, i.e., any state concern that the absence of this
for which valid operating limits have proposed Requirements set forth in
TOP–004–0 are sufficiently clear and information could lead to an erroneous
not been determined, operations should assessment of system capability.
be restored to respect proven reliable objective to provide guidance for
power system limits within 30 minutes. compliance. iii. Comments
We agree with NERC that 30 minutes is 999. Accordingly, giving due weight
to the technical expertise of the ERO 1002. NERC agrees with Commission
a reasonable period within which Staff that Attachment 1 of TOP–005–1
operators should return the system to a and with the expectation that the
Reliability Standard will accomplish the should be modified to include special
reliable operating state. However, as protection systems and power system
stated in the Staff Preliminary purpose represented to the Commission
by the ERO and that it will improve the stabilizers.
Assessment it may be interpreted as a 1003. ReliabilityFirst states that
grace period to the detriment of reliability of the nation’s Bulk-Power
System, the Commission proposes to information pertaining to the special
reliability and therefore the Commission protection systems is included in
approve Reliability Standard TOP–004–
proposes that Requirement R4 be Attachment 1, section 2.6, which refers
modified to state that the system should to ‘‘new or degraded special protection
be restored to respect proven reliable systems.’’
power system limits as soon as possible 1004. ISO/RTO Council argues that
and no longer than 30 minutes. the Commission should direct NERC to
996. With respect to NERC’s comment eliminate the requirement that each data
to TOP–004–0 that (1) includes
that the system is not allowed to drift in recipient sign a confidentiality
Measures and Levels of Non-
and out of a reliable state, the agreement. It claims that the
Compliance; (2) clarifies that the 30
Commission is concerned that neither requirement to sign a confidentiality
minute response time is not a grace
TOP–004–0 nor the IRO Reliability period; and (3) defines in Requirement agreement is an administrative matter,
Standards address this issue and that R3, high risk conditions under which not a reliability issue.
some entities may be engaging in this the system must be operated to respect iv. Commission Proposal
practice to the detriment of reliability. multiple outages. In addition, we
The Commission proposes to require 1005. ReliabilityFirst points out that
propose to direct that the ERO perform the operational information pertaining
that NERC survey and report the a survey of the prevailing operating
operating practices and actual to the ‘‘new or degraded special
practices and actual operating
experiences surrounding drifting into protection systems’’ is included in
experiences surrounding drifting in and
and out of IROL limits.305 Attachment 1. However, a special
out of IROL limits. As part of the survey,
997. The Staff Preliminary we would require all reliability 306 NERC states that, effective November 1, 2006,
Assessment noted that while coordinators to report any violations of
proposed Reliability Standard TOP–005–1 will

Requirement R3 states that, when IROLs, their causes, the date and time replace existing Reliability Standard, TOP–005–0.
practical, the system must be operated of the violation, and the duration in 307 Interregional Security Network is a data
which actual operations exceeded IROL exchange system that facilitates the exchange of
305 The issue of drifting in and out of IROL limits real-time and other operational data among
is discussed in the IRO chapter and provides
to the ERO on a monthly basis for one reliability coordinators, balancing authorities, and
specifics of proposed survey in greater detail. See year beginning two months after the transmission operators to help ensure reliable
discussion for IRO–005–1. effective date of the final rule. electric power system operations.
protection system may be turned on or 006–0 to address the lack of Measures decisions.’’ 309 While TOP–006–0
off and not be degraded. Awareness of and Levels of Non-Compliance. requires that a significant amount of
the operational state is different from data be provided to operating personnel,
knowing that degradation has occurred. we agree with NERC that this is only
In addition, Attachment 1 does not 1009. The Staff Preliminary one component of a successful
contain information about power system Assessment noted that, while TOP–006– situational awareness strategy. The data
stabilizers. While Attachment 1 contains 0 identifies data requirements it does must be converted into information that
a large amount of data pertaining to not identify any minimum acceptable operators can use to assess the state of
Bulk-Power System reliability, inclusion tools and capabilities to turn the data the system and its vulnerability, should
of information about the operation into information to aid in situational a contingency occur, and take
status of special protection systems will awareness. Staff explained that appropriate actions to maintain a
provide a more comprehensive list. We reliability coordinators, transmission reliable system. We note that the
agree with NERC and propose that operators and balancing authorities Requirement R7 of Reliability Standard
Attachment 1 be modified to include the must be aware of the status of their IRO–002–0 requires that reliability
status of special protection systems and respective systems, and such situational coordinators have adequate tools such
power system stabilizers. awareness cannot be obtained by as state estimation, pre and post
viewing massive amounts of raw data. contingency analysis capabilities and
1006. We agree with ISO/RTO
wide area overview displays. We believe
Council that the reference to execution iii. Comments
that similar tools should be made
of confidentiality agreement should be 1010. NERC agrees with the Staff available to transmission providers and
deleted from the Reliability Standard Preliminary Assessment that situational balancing authorities and propose that
and NERC should address the issue awareness is ‘‘key’’ to operating an the ERO add a new Requirement in this
separately and globally as we indicate interconnected electric system reliably Reliability Standard to provide adequate
above in our discussion of TOP–002–1. and that data collection is only one tools to transmission operators and
1007. TOP–005–1 furthers an component of a successful situational balancing authorities, which will
important reliability goal of ensuring awareness strategy. NERC, however, provide them situational awareness.
that reliability entities have the states that whether a Reliability 1015. Although we agree with NERC
operating data needed to monitor Standard should specify how data that further discussions may be needed
system conditions within their area. should be analyzed and presented to the with vendors who supply situational
Further, the Requirements set forth in system operator or reliability awareness and visualization tools,
TOP–005–1 are sufficiently clear and coordinator requires further discussion, modification of TOP–006–0 should not
objective to provide guidance for including discussions with vendors who have to wait for those discussions to
compliance. Accordingly, giving due supply situational awareness and occur. A variety of off-the-shelf tools are
weight to the technical expertise of the visualization tools. currently available from vendors and in
ERO and with the expectation that the 1011. ReliabilityFirst comments that use across the industry. At a
Reliability Standard will accomplish the due to the variety of equipment used to Commission sponsored technical
purpose represented to the Commission manage the Bulk-Electric System, it is conference on July 14, 2004, staff
by the ERO and that it will improve the impractical to specify the type of presented its views on minimum
reliability of the nation’s Bulk-Power software and processes acceptable for requirements and best practices for
System, the Commission proposes to monitoring. reliability tools for the purpose of
approve Reliability Standard TOP–005– 1012. MRO states that Requirement initiating discussions on what these
1 as mandatory and enforceable. In R3, which requires an applicable entity minimum reliability capabilities ought
addition, pursuant to section 215(d)(5) to provide ‘‘appropriate technical to be. We believe that identification of
of the FPA and § 39.5(f) of our information’’ concerning protective the types of tools and what they should
regulations, the Commission proposes to relays, should be revised to clarify the minimally accomplish would improve
direct that NERC submit a modification phrase, ‘‘appropriate technical the proposed Reliability Standard.
to TOP–005–1 that: (1) Includes information.’’ Entities that must comply with TOP–
information about the operational status 006–0 could choose among the available
of special protection systems and power software tools that accomplish the
system stabilizers in Attachment 1; and 1013. The Commission proposes to desired goal or meet the Requirement
(2) deletes references to confidentiality approve TOP–006–0 as mandatory and set forth in the Reliability Standard.
agreements, but addresses the issue enforceable. In addition, we propose to Accordingly, we propose to direct NERC
separately to ensure that necessary direct that NERC develop modifications to modify TOP–006–0 to include a
protections are in place related to to the Reliability Standard, as discussed requirement for a minimum set of tools
confidential information. below. for transmission operators and
1014. The Blackout Report states that balancing authorities that will aid in
g. Monitoring System Conditions (TOP– ‘‘a principal cause of the blackout was situational awareness.
006–0) a lack of situational awareness, which 1016. We agree with MRO that the
i. NERC Proposal was in turn a result of inadequate tools phrase ‘‘appropriate technical
and back-up capabilities.’’ 308 In information’’ is open to interpretation
1008. TOP–006–0 requires that addition, in reviewing common factors and propose to direct that NERC modify
operating personnel continuously between the August 2003 blackout and TOP–006–0, Requirement R3, to identify
monitor essential Bulk-Power System other major outages the Blackout Report the specific type of technical
parameters such as line flows, circuit states ‘‘power system data may be information concerning protective
breaker status, generator resources, available but not be presented to relays that should be provided.
relays, weather forecasts and frequency operators or coordinators as information 1017. TOP–006–0 serves an important
to ensure that the facilities do not they can use in making appropriate reliability goal of requiring monitoring
exceed their operating limits. NERC
indicates that it plans to modify TOP– 308 See Blackout Report at 159. 309 Id. at 108.
of essential Bulk-Power System minutes.’’310 The Staff Preliminary compliance section of this Reliability
parameters such as the status of power Assessment explained that the phrase Standard.
system elements, real and reactive ‘‘or other event’’ in this Requirement is
power flows, voltages and frequency to open to interpretation. One
ensure that the system and its interpretation is that it allows IROLs to 1025. As noted in our discussion in
equipment are operated in a reliable and be exceeded under normal pre- IRO–005 and TOP–004, the Commission
safe manner. The Commission believes contingency conditions, provided the is concerned about systems drifting in
that it is important for NERC to provide system can be returned to a secure state and out of SOL and IROL violations.
Measures and Levels of Non-compliance within 30 minutes. Another, more One source of justification for that
for this proposed Reliability Standard. conservative, interpretation is that the practice is the term ‘‘other event.’’ We
Nonetheless, the proposed Requirement does not allow IROLs to be agree with NERC that SOL and IROL
Requirements set forth in TOP–006–0 exceeded under normal pre-contingency need better definitions and TOP–007–0
are sufficiently clear and objective to conditions, and that after a contingency could be improved by making the
provide guidance for compliance. occurs the system must be returned to requirements clearer. Our proposal for a
a secure condition as soon as possible survey in IRO–005 and TOP–004 to
1018. Accordingly, giving due weight collect data will give us more
to the technical expertise of the ERO and no later than 30 minutes. The Staff
Preliminary Assessment cautioned that, information about the extent of the
and with the expectation that the problem with regard to drifting in and
Reliability Standard will accomplish the if the system is operated in a less
conservative manner during the period out of SOL and IROL violations.
purpose represented to the Commission 1026. Regarding MRO’s
by the ERO, and that it will improve the where IROL is exceeded, even a single
system contingency could cause recommendation that IROL violations
reliability of the nation’s Bulk-Power exceeding 30 minutes be reported to
System the Commission proposes to instability, uncontrolled separation, and
NERC within 48 hours, we will leave
approve Reliability Standard TOP–006– even a cascading blackout.
this determination to NERC because we
0 as mandatory and enforceable. In iii. Comments consider this to be a matter of
addition, pursuant to section 215(d)(5) administrative convenience.
of the FPA and § 39.5(f) of our 1021. NERC states that SOL and IROL 1027. TOP–007–0 serves an important
regulations, the Commission proposes to need better definition, also noting that reliability goal of ensuring that when
direct that NERC submit a modification SOL and IROL are operating states that critical limits are violated, the violations
to TOP–006–0 that: (1) Includes system operators must move away from are reported and appropriate actions
Measures and Levels of Non-compliance as quickly as possible. It will consider taken to avoid any cascading outages.
elements; (2) includes a new revising the standard to clarify that a The Commission believes that it is
requirement related to the provision of contingency is not required to violate important that NERC address the
a minimum set of analysis tools that the SOL and IROL limits. NERC notes ambiguity regarding IROL violations,
will aid in situational awareness; and that it has commissioned an Operating discussed above. Nonetheless, the
(3) clarifies the meaning of ‘‘appropriate Limit Definition Task Force to work on proposed Requirements set forth in
technical information’’ concerning this matter and the Task Force is TOP–007–0 are sufficiently clear and
protective relays. expected to submit its recommendation objective to provide guidance for
by the end of 2006. compliance.
h. Reporting SOL and IROL Violations 1022. Also seeking more definition 1028. Accordingly, giving due weight
(TOP–007–0) and detail on SOL and IROL, to the technical expertise of the ERO
i. NERC Proposal ReliabilityFirst urges the acceleration of and with the expectation that the
standards now being developed to Reliability Standard will accomplish the
1019. TOP–007–0 requires that clarify SOL and IROL. However, it adds purpose represented to the Commission
violations of SOL and IROL are that it would be impractical to identify by the ERO and that it will improve the
promptly reported to the reliability and study all possibilities for alleviating reliability of the nation’s Bulk-Power
coordinator so that it can direct SOL and IROL. System, the Commission believes that
corrective action and inform other 1023. ISO/RTO Council agrees with Reliability Standard TOP–007–0 is just,
affected systems. It also requires a the Staff Preliminary Assessment that reasonable, not unduly discriminatory
transmission operator to mitigate an this Reliability Standard is open to or preferential, and in the public
IROL violation as soon as possible but interpretation. However, ISO/RTO interest; and proposes to approve it as
no longer than 30 minutes. A Council states that it is appropriate to mandatory and enforceable.
transmission operator must take ‘‘all give system operators discretion in 1029. The Commission solicits
appropriate actions up to and including making real-time system operating comment on potentially overlapping
shedding firm load’’ to return its system decisions. It comments that a more matters addressed in Reliability
to a stable state within IROL. Finally, it prescriptive standard would unduly Standards TOP–007–0 and TOP–008–0.
requires that the reliability coordinator restrict system operators and the nature The title and the purpose of TOP–007–
take action to mitigate an SOL or IROL of real-time operations requires giving 0 state that it ensures that SOL and
violation if the transmission operator’s these entities some leeway. Thus, the IROL violations are being reported, but
actions are not effective. ISO/RTO Council recommends that the we believe that only Requirement R1
ii. Staff Preliminary Assessment Commission approve TOP–007–0 in its relates to reporting. The remaining
present form. requirements in TOP–007–0, R2, R3 and
1020. As indicated above, TOP–007– 1024. MRO recommends that an IROL R4, go beyond reporting of violations
0 requires that, ‘‘[f]ollowing a violation exceeding 30 minutes be and provide that the transmission
[c]ontingency or other event that results reported to NERC within 48 hours rather operator will take actions on its own or
in an IROL violation, the transmission than the 72 hours allowed under the as directed by the reliability
operator shall return its transmission coordinator. We observe that proposed
system to within IROL as soon as 310 Reliability Standard TOP–007–0, Requirement Reliability Standard TOP–008–0
possible, but not longer than 30 R2. addresses the same subject. In fact,
Requirement R1 of TOP–008–0 is Reliability Standard will accomplish the and facilities to be simulated in the
similar to Requirement R3 of TOP–007– purpose represented to the Commission transmission planning process.
0. It appears that both Reliability by the ERO and that it will improve the 1038. The TPL group of Reliability
Standards deal with the same subject, reliability of the nation’s Bulk-Power Standards contains a table designated
but more emphasis is placed on System, the Commission proposes to Table 1 (Transmission System
reporting in TOP–007–0. If two separate approve Reliability Standard TOP–008– Standards—Normal and Emergency
Reliability Standards address similar 0 as mandatory and enforceable. In Conditions), which is a key part of this
topics, the purpose statement should addition, pursuant to section 215(d)(5) group of Reliability Standards. It lays
succinctly capture the intent of each of the FPA and § 39.5(f) of our out the system performance
Reliability Standard. regulations, the Commission proposes to requirements for a range of
direct that NERC submit a modification contingencies grouped according to the
i. Response to Transmission Limit number of elements forced out of
Violations (TOP–008–0) to TOP–008–0 that: (1) includes
Measures and Levels of Non-compliance service as a result of the contingency.
i. NERC Proposal For example: Category A applies to the
elements; and (2) includes reliability
1030. TOP–008–0 requires a normal system with no contingencies;
coordinators in the Applicability
transmission owner to take immediate Category B applies to contingencies
section.
steps to mitigate SOL and IROL resulting in the loss of a single element
violations. NERC indicates that it plans 12. TPL: Transmission Planning defined as a generator, transmission
to modify TOP–008–0 to address the circuit, transformer, single DC pole with
a. Overview or without a fault; Category C applies to
lack of Measures and Levels of Non-
Compliance. 1037. The Transmission Planning a contingency resulting in loss of two or
(TPL) group of Reliability Standards more elements, such as any two circuits
ii. Staff Preliminary Assessment on a multiple circuit tower line or both
consists of six Reliability Standards that
1031. The Staff Preliminary are applicable to transmission planners, poles of a bi-polar DC line; while
Assessment did not identify any planning authorities and regional Category D applies to extreme
substantive issues in TOP–008–0, other reliability organizations. These contingencies resulting in loss of
than noting that it does not contain multiple elements, such as a substation
Reliability Standards are intended to
Measures or Levels of Non-Compliance. or all lines on a right-of-way. The
ensure that the transmission system is
system performance expectations for
iii. Comments planned and designed to meet an
Category C contingencies are lower than
1032. No comments were submitted appropriate and specific set of reliability
those for Category B contingencies, in
regarding TOP–008–0. criteria. Transmission planning is a
that they allow unspecified amounts of
process that involves a number of stages planned or controlled loss of demand.
iv. Commission Proposal including developing a model of the
1033. We observe that proposed Bulk-Power System, using this model to b. General Issues
Reliability Standard TOP–007–0 assess the performance of the system for 1039. Both the Staff Preliminary
addresses the same subject. a range of operating conditions and Assessment and commenters raise a
1034. Requirements R1 through R4 contingencies, determining those number of issues that apply generally to
provide that the transmission operator operating conditions and contingencies Reliability Standards TPL–001–0
shall take certain actions to mitigate the that have an undesirable reliability through TPL–004–0. We address these
effects of SOL and IROL violations. No impact, identifying the nature and the issues here and, in addition, apply our
role is specified for the reliability need for transmission upgrades, general discussion when addressing
coordinator. A reliability coordinator developing and evaluating a range of each individual Reliability Standard.
plays a key role in the reliability of the transmission reinforcement and upgrade
Bulk-Power Systems and should be i. Staff Preliminary Assessment
options and selecting the preferred
involved in the decision-making process option, taking into account the time 1040. Staff stated that, in general, the
of bringing the system back within needed to place the facilities in service. TPL Reliability Standards raise issues
operating limits as soon as possible. A The proposed TPL Reliability Standards regarding requirements that are
parallel Reliability Standard covering address: (1) the types of simulations and ambiguous, and ‘‘limited sets of
this subject, TOP–007–0, identifies a assessments that must be performed to contingencies,’’ i.e, they do not address
role for the reliability coordinator. The ensure that reliable systems are outages of multiple-elements resulting
Commission proposes to require NERC developed to meet present and future from some probable single events and
to modify TOP–008–0 to apply to system needs 311 and (2) the information critical system conditions.314
reliability coordinators. required to assess regional compliance 1041. NERC responds that, while the
1035. TOP–008–0 serves an important with planning criteria and for self- proposed Reliability Standards need
reliability goal of ensuring that when assessment of regional reliability.312 The review and incremental improvement,
critical limits are violated, appropriate differing definitions of the Bulk-Power staff’s criticisms of the TPL group of
actions are taken to avoid any cascading System and bulk electric system Reliability Standards are overstated.
outages. The Commission believes that discussed above is central to the Likewise, EEI believes that the TPL
it is important for NERC to provide concerns raised by this group of group of proposed Reliability Standards
Measures and Levels of non-compliance Reliability Standards.313 That issue has is technically sound and sufficiently
elements for this proposed Reliability important implications for the range of detailed. NERC contends that the
Standard. Nonetheless, the proposed purpose of Reliability Standards is not
contingencies that must be evaluated

Requirements set forth in TOP–008–0 to make the Bulk-Power System failure-
are sufficiently clear and objective to 311 See TPL–001–0, TPL–002–0, TPL–003–0, and
proof, but to ensure it is able to meet
provide guidance for compliance. TPL–004–0. specific performance requirements
1036. Accordingly, giving due weight 312 See TPL–005–0 and TPL–006–0. under normal conditions and following
to the technical expertise of the ERO 313 See discussion of Bulk Power System v. bulk
and with the expectation that the electric system in section III.D.5 above. 314 Staff Preliminary Assessment at 108.
single contingencies and certain rationale for determining critical system entities to conduct sensitivity studies to
credible multiple-contingencies. The conditions and study years. ‘‘bracket’’ the range of probable
TPL standards require assessment of 1044. A number of commenters outcomes. Thus, without having to
multiple-contingency and extreme reacted strongly to staff’s suggestion anticipate ‘‘every conceivable critical
contingency events but do not require regarding the use of simulations to operating condition,’’ planning entities
that the system be able to withstand determine ‘‘the most onerous sets of will have a means to identify an
such events without loss of firm load system conditions.’’ CenterPoint states appropriate range of critical operating
and, according to NERC, requiring this that planning for the most onerous set conditions. While Requirement R1.3
would be impractical and extremely of conditions would have an identifies firm transfers, selected
costly. unreasonable impact on transmission demand levels, existing and planned
1042. The Commission agrees with rates and the need for new transmission facilities, reactive power resources, and
NERC that the Reliability Standards are lines. control devices, a sensitivity study to
not intended to make the Bulk-Power 1045. MRO and MidAmerican support determine critical system conditions
System failure-proof. Nor do we propose clarifying ambiguities but prefer that should consider such additional matters
to modify the TPL Reliability Standards Reliability Standards not become overly as the range of load power factors,
to require that the system be able to prescriptive in a way that would restrict generation retirements, generation
withstand all multiple-contingency and engineering judgment. For example, dispatch and transaction patterns,
extreme contingency events without MRO comments that sensitivity studies controllable loads and DSM at specific
loss of load. Nonetheless, we believe should be performed as part of the locations, and transmission outages,
that the planning-related Reliability planning process, but it recommends including outages of reactive power
Standards could be improved to better that the planning entity develop the devices. The Commission is not
take into account probable system conditions, planning years, and precluding other approaches to define
contingencies when planning studies other aspects of the sensitivity and document critical system
are conducted. Much of our proposal is scenarios. ReliabilityFirst adds that conditions that have been proven to be
consistent with the possible means of defining a checklist for planning would effective.319 We propose that the ERO
improvement recognized by NERC in its encourage planners to rely on the modify the relevant TPL Reliability
comments responding to the Staff checklist to the exclusion of good Standards accordingly. Further we
Preliminary Assessment. Further, we engineering judgment. propose that the results of these studies
note that a number of regions currently 1046. The TPL Reliability Standards be documented to support the selection
utilize superior planning practices that require Transmission Planners and of critical system conditions used in
may be characterized as ‘‘best practices’’ Planning Authorities to conduct system assessing system performance.
and are more stringent than the performance assessments. Such
proposed TPL Reliability Standards.315 iii. Element-Based vs. Event-Based
assessments must address specific
Accordingly, we propose that the ERO Contingencies
topics, including ‘‘critical system
submit to the Commission such regional conditions and study years as deemed 1048. As explained in the TPL
differences in transmission planning appropriate by the entity performing the overview above, Table 1 of the TPL
criteria that are more stringent than study.’’ 317 As noted by staff and Standards lays out the system
those specified in the TPL group of commenters,318 system conditions are as performance requirements for a range of
Reliability Standards. important as contingencies in evaluating contingencies grouped according to the
ii. Stressing the System During number of elements forced out of
the performance of present and future
Simulations service as a result of the contingency.
1043. Staff stated that, when carrying systems. The Commission is concerned
that this Requirement allows complete The Staff Preliminary Assessment
out power systems simulations it is
discretion to the entity performing the explained that the single unanticipated
important to ensure that the system
study and does not provide any failure of some elements in the Bulk-
under study is sufficiently stressed so
that any underlying weaknesses or parameters or criteria for such an entity Power System can result in the loss of
deficiencies can be identified and to test to determine critical system conditions multiple elements. Because of the
the performance of the system under and study years in a rational and resulting impact on reliability, some
study for a wide variety of probable consistent manner. regions base their groupings according
scenarios. It suggested that such 1047. With regard to CenterPoint’s to the event irrespective of the number
simulations ‘‘would determine the most comment, we agree that it is not realistic of elements forced out of service (as
onerous sets of system conditions to expect the ERO to develop a opposed to categorizing contingencies
* * *’’ 316 Staff stated that system Reliability Standard that anticipates according to elements forced out of
conditions are as important as every conceivable critical operating service). For such a region, a single
contingencies in evaluating the condition applicable to unknown future event that results in the loss of multiple
performance of present and future configurations for regions with various elements, e.g., a lightning strike, that
systems, but that the Reliability configurations and operating simultaneously forces out of service
Standards do not require that sensitivity characteristics. The practical solution both circuits of a double circuit tower
studies be carried out or specify the that has been implemented by many in line, is considered a single contingency
the industry is to perform sensitivity similar to the loss of a single element
315 Examples include practices cited in NERC’s studies that define and provide such as a generator. What is acceptable
‘‘Examples of Excellence’’ found in its Readiness documentation of the impact on the in one region may not be acceptable in
Audits, filings for jurisdictional utilities in Part 4 system. For that reason, we believe that another region because of historical
of FERC Form No. 715, Transmission Planning

Reliability Criteria. Regional Reliability it would be appropriate for planning adoption of reliability criteria rather
Organizations also specify requirements that exceed than physical differences in systems.
NERC Reliability Standards, such as WECC’s 317 E.g., Reliability Standard TPL–001–0,
Minimum Operating Requirement Criteria and the Requirement R1.3. 319 While contingencies have been defined in
NPCC Document A–02—Basic Criteria for Design 318 See Staff Preliminary Assessment at 109. See Table I, the Commission does not believe systems
and Operation of Interconnected Power Systems. also CenterPoint, MidAmerican and MRO conditions lend themselves to a table or a simple
316 Staff Preliminary Assessment at 109. comments. list.
1049. Most commenters that address planning standards or in the CIP specific study elements selected from
this topic oppose an event-based standards. each of the categories for assessments
contingency planning approach on the are subject to approval by the associated
c. System Performance Under Normal
grounds that it is difficult to perform, regional reliability organization.
(No Contingency) Conditions (TPL–001–
too conservative, too costly to the
0) ii. Staff Preliminary Assessment
public, too rigid, or not based on the
probabilities of outages occurring in the i. NERC Proposal 1054. The Staff Preliminary
real system.320 National Grid, on the 1052. Proposed Reliability Standard Assessment explained that TPL–001–0
other hand, supports event-based TPL–001–0 deals with planning relevant does not require the consideration of
contingency planning on the contention to system performance under normal planned outages, which are a common
that it provides a more robust analysis. conditions, i.e., a situation where no occurrence, in assessing system
The Commission believes that planning system contingency or no unexpected performance. Staff also stated that the
standards must influence system design failure or outage of a system component Reliability Standard does not require
and not the other way around. To has occurred.322 NERC states in its sensitivity studies to define critical
achieve this objective, planning application that the proposed Reliability conditions and that footnote (a) to Table
standards should promote system Standard ensures that the Bulk-Power 1—which states in part that ‘‘Applicable
designs that result in the minimum set System is planned to meet the system Ratings may include Emergency Ratings
of elements being removed from service performance requirements under these applicable for short durations as
for ‘‘unanticipated failures of system normal conditions by requiring the required to permit operating steps
elements.’’ 321 The Commission notes transmission planner and the planning necessary to maintain system control’’
that entities with planning authority to evaluate their transmission and therefore only pertains to
responsibility for approximately half of system annually and document the contingency conditions—should be
the load in the nation analyze ability of that system to meet the clarified that it is only applicable to
contingencies based on the actual performance requirements established Categories B, C, and D, i.e., situations
number of elements that would be in the Reliability Standard under involving system contingencies or
removed from service in the actual conditions where no system failures of system components.
power system for an unanticipated contingencies are present.323 Meeting 1055. Staff noted that the purpose
failure of system elements, rather than these requirements means two things. statement for this Reliability Standard is
simulating only the outages identified in First, when all system facilities are in identical to those for TPL–002, TPL–003
Table 1. Simply put, the Commission service and normal operating and TPL–004 although the goal and
believes that the simulations should procedures are in effect, the system can requirements are different. The
faithfully duplicate what will happen in be operated to supply projected transmission planning Reliability
the actual power system and not a customer demands and projected firm Standards TPL–001–0 through TPL–
generic listing of outages. (non-recallable reserved) transmission 004–0 define various categories of
1050. In addition, the Bulk-Power services at all demand levels over the conditions to be simulated. Staff noted
System must be operated and planned range of forecast system demands. that Requirement R1.3 in each of these
to be operated within a number of Secondly, the system remains stable and Reliability Standards allows fewer than
conditions after a contingency or cyber within the applicable ratings for thermal the specific study elements identified in
event. The Contingency can be a sudden and voltage limits, no loss of demand or Table 1 to be selected from each of the
disturbance or unanticipated failure of curtailed firm transfers occurs, and no categories for assessments with the
any system element. If a specific portion cascading outages occur. TPL–001–0 approval by the associated regional
of the system has been designed such applies both to near-term and longer- reliability organization, even though
that the response to a failure results in term planning horizons. selection of fewer elements may impact
multiple lines, transformers, generators, 1053. The Requirements of TPL–001– neighboring systems.
circuit breakers, etc., being removed 0 specify that the planning authority
from service, then the Commission iii. Comments
and transmission planner must
proposes that this is what should be demonstrate through a valid assessment 1056. MRO comments that the
simulated. that the Reliability Standard’s system Requirements of TPL–001–0 need
1051. Planning for Cybersecurity performance requirements can be met. clarification because it is not clear as to
incidents have not been part of the The assessment must be supported by a what is required. In addition, it asserts
traditional planning study process. One current or past study and/or system that staff appears to indicate that Order
approach is to identify specific simulation testing that addresses No. 2003 and TPL–001–0 have separate
vulnerabilities based on the designs at various categories of conditions to be requirements which must be followed.
specific locations and then study the simulated as set forth in the Reliability To avoid the creation of dual Reliability
impact of those vulnerabilities. The Standard to verify system performance Standards, MRO maintains that the
Commission is interested in comments under normal conditions. When system Commission should explain how the
from industry on this subject such as simulations indicate that the system Requirements of this Reliability
whether planning for cybersecurity cannot meet the performance Standard relate to the requirements of
events should be addressed in the requirements stipulated in the Order No. 2003 and clarify that entities
Reliability Standard, a documented plan will only be required to comply with a
320 See, e.g., CenterPoint, EEIm Mid American,
to achieve system performance single set of reliability requirements.
New York Commission and ReliabilityFirst. 1057. ReliabilityFirst disagrees that
321 Section 215(a) of the FPA defines ‘‘Reliable requirements must be prepared. The
footnote (a) to Table 1 is ambiguous. It
Operation’’ as ‘‘means’’ operating the elements of

the Bulk-Power System within equipment and 322 The NERC glossay defines a ‘‘contingency’’ as states that emergency ratings are not
electric system thermal, voltage, and stability limits ‘‘[t]he unexpected failure or outage of a system applicable when all facilities are in
so that instability, uncontrolled separation, or component, such as a generator, transmission line, service.
cascading failures of such system will not occur as circuit breaker, switch or other electrical element.’’
a result of sudden disturbance, including a NERC glossary at 3. 1058. ISO/RTO Council comments
Cybersecurity Incident, or unanticipated fialure of 323 The performance requirements are set forth in that Requirement 1 of TPL–001–0
system elements’’ (emphasis added). Category A of Table I of the standard. should define more clearly which entity
is classified as a ‘‘planning authority.’’ system conditions and study years used be modified to state explicitly that
It also recommends that because the in assessing system performance.324 emergency ratings apply to Category B
planning authority only has authority to 1062. The Commission notes that load and C (contingency conditions) and not
plan for system expansion, the word models used in system studies have a to Category A (system intact). The
‘‘consider’’ used in Requirement R2 in significant impact on system Commission proposes that footnote (a)
connection with lead times necessary performance, particularly as they relate be modified in the revised Reliability
for implementation should be changed to the dynamic performance of the Standard as recommended by TIS and
to ‘‘estimate.’’ system. The Commission proposes that that the normal facility rating be in
the Reliability Standard be modified to accordance with Reliability Standard
iv. Commission Proposal FAC–008–1 and normal voltages be in
require documentation of load models
1059. The Commission proposes to used in system studies and supporting accordance with Reliability Standard
approve TPL–001–0 as a mandatory and rationale for their use. VAR–001–1.
enforceable Reliability Standard. In 1063. Requirement R1.3 of TPL–001– 1066. While the Commission has
addition, we propose to direct that 0 provides that the Planning Authority identified a number of concerns with
NERC develop modifications to the and Transmission Planner must provide regard to TPL–001–0, this proposed
Reliability Standard, as discussed studies and system simulations to Reliability Standard serves an important
below. support its planning assessment, and purpose by ensuring the Bulk-Power
1060. Transmission Planning requires that the ‘‘specific elements selected [for System is planned to meet the system
information on forecasted loads and the study] shall be acceptable to the performance requirements under normal
probable generation plans to supply associated Regional Reliability conditions. Further, the Requirements
those loads. While information on Organization(s).’’ As we have discussed set forth in TPL–001–0 are sufficiently
forecasted loads, energy, interruptible elsewhere, the Commission believes that clear and objective to provide guidance
loads and direct control load the regional reliability organization for compliance.
management over the next ten years are should not have such a role in the 1067. Accordingly, giving due weight
required to be made available by the context of mandatory Reliability to the technical expertise of the ERO
MOD Reliability Standards, there is no Standards. Rather, the ERO or the and with the expectation that the
requirement to inform transmission appropriate Regional Entity(s) should Reliability Standard will accomplish the
planners and planning authorities of provide this oversight. Also, given that purpose represented to the Commission
new or retiring generation resources. We neighboring systems may be adversely by the ERO and that it will improve the
seek comments on whether transmission impacted, the Commission proposes reliability of the nation’s Bulk-Power
planners and planning authorities are that the neighboring systems be System, the Commission proposes to
currently able to obtain and validate involved in the determination and approve Reliability Standard TPL–001–
resource information on new generation review of system conditions and 0 as mandatory and enforceable. In
and retirements for assessments over the contingencies to be assessed. addition, pursuant to section 215(d)(5)
ten year planning horizon. If 1064. As mentioned above, staff noted of the FPA and § 39.5(f) of our
that TPL–001–0 does not require the regulations, the Commission proposes to
transmission planners and planning
consideration of planned outages. While direct that NERC submit a modification
authorities currently experience
Reliability First agrees with staff, to TPL–001–0 that: (1) Requires that
difficulty obtaining this information,
CenterPoint disagrees because operators critical system conditions be
how should this potential information
schedule planned outages at times when determined by conducting sensitivity
gap be addressed?
the reliability risk is minimized. studies; (2) requires that system
1061. In assessing system
Planned outages are an every day conditions and contingencies assessed
performance, TPL–001–0 requires be reviewed by neighboring systems; (3)
entities to cover ‘‘critical system occurrence that, if excluded, would not
provide an accurate assessment of modifies Requirement R1.3 to substitute
conditions and study years,’’ as deemed the reference to regional reliability
appropriate by the entity performing the system conditions. Accordingly, the
Commission proposes to direct that organization with Regional Entity; (4)
study. As discussed above regarding requires consideration of planned
Stressing the System During NERC modify TPL–001–0 to require
outages of critical equipment; and (5)
Simulations, the Reliability Standard consideration of planned outages of
modifies footnote (a) as discussed
does not specify the rationale for critical equipment. We note that TPL–
above.
determining critical system conditions 002–0 through TPL–004–0 require
and study years. Consistent with our consideration of planned outages. d. System Performance Following Loss
discussion of this issue above, the 1065. NERC and other commenters of a Single Element (TPL–002–0)
Commission proposes that the ERO agree with staff that footnote (a) to Table i. NERC Proposal
modify TPL–001–0 to require that 1 requires clarification. The NERC
Transmission Issues Subcommittee 1068. Proposed Reliability Standard
critical system conditions be
(TIS) 325 recommended that footnote (a) TPL–002–0 concerns planning system
determined by conducting sensitivity
relevant to performance under
studies covering such factors as load
324 The Commission expects that the results of the contingency conditions involving the
power factors, different likely
sensitivity studies taken together would form the failure of a single element with or
generation expansion scenarios basis for evaluating adherence to criteria, i.e., without a fault, i.e., the occurrence of an
including generation retirements, adhering to system performance expectations
event such as a short circuit, a broken
alternative generation dispatch and following contingencies specified in Table 1.
Failure of one sensitivity study of a very low wire or an intermittent connection.
transaction patterns, controllable loads
NERC states that the Reliability
probability simulation would not, by itself, warrant

and DSM at specific locations, and the need for mitigation plans. However, if the Standard ensures that the future Bulk-
transmission outages, including outages simulations, taken as a whole, show miltiple areas
Power System is planned to meet the
of reactive power devices. The of weaknesses or criteria violations, then mitigation
plans would be required. system performance requirements of a
Commission would expect that the 325 NERC Transmission Issues Subcommittee,
results of these studies would be used Evaluation of Criteria, Methods, and Practices Used Response to NERC Blackout Recommendation 13c
to document the selection of critical for System Design, Planning and Analysis in (Nov. 28, 2005) (NERC TIS Report) at 15.
system, with the loss of one element, by performance requirements, are conceivable combination of outages or
requiring that the transmission planner ambiguous and need to be clarified so that it would be worthwhile to do so.
and planning authority annually that they are applied appropriately and 1075. ReliabilityFirst and TAPS also
evaluate and document the ability of the consistently by all the entities to whom agree that footnote (b) needs
transmission system to meet the they apply. In particular staff noted that clarification. However, ReliabilityFirst
performance requirements where an for TPL–002–0 footnote (b) to the comments that the wording simply
event results in the loss of a single Reliability Standard is sufficiently reflects how the system is actually built
element.326 Meeting these requirements ambiguous to allow differing rather than indicating a lower level of
means two things. First, the system can interpretations.327 performance.
be operated following the event to 1071. Staff further noted that while 1076. The ISO/RTO Council
supply projected firm customer the Reliability Standard defines various comments that the process for
demands and projected firm (non- categories of conditions to be simulated, determining load levels for purposes of
recallable reserved) transmission the specific study elements selected Requirement 1 of TPL–002–0 needs to
services at all demand levels over the from each of the categories for be standardized, and local area
range of forecast system demands. assessments are subject to approval by networks and system adjustments
Second, the system remains stable and the associated regional reliability should be specifically defined.
within the applicable ratings for thermal organization, even though they may 1077. MRO finds an inconsistency in
and voltage limits, no loss of demand or impact neighboring utilities and Table 1. Under the ‘‘Loss of Demand or
curtailed firm transfers occurs, and no reliability coordinators. Curtailed Firm Transfers’’ column for
cascading outages occur. The Reliability category B the entries are all ‘‘No.’’
Standard applies both to near-term and iii. Comments
However, footnote (b) indicates that
longer-term planning horizons. 1072. NERC states that the reliability curtailments of contracted firm transfers
1069. TPL–002–0 specifies that the Standards do not consider load are permitted. MRO states that the ‘‘no’’
planning authority and transmission shedding acceptable for single response in this column may need to be
planner must demonstrate through a contingency events. As such, footnote revised to ‘‘Planned/Controlled’’ as it is
valid assessment that the standard’s (b) provides a limited exception to the used for other categories of
system performance requirements can general rule against serving load from a disturbances.
be met. The assessment must be radial transmission line.
supported by a current or past study 1073. In addition to its comments iv. Commission Proposal
and/or system simulation testing that regarding stressing the system discussed 1078. The Commission proposes to
addresses various categories of above, NERC comments that it intends approve TPL–002–0 as a mandatory and
conditions to be simulated, as set forth to pursue the following improvements: enforceable Reliability Standard. In
in the Reliability Standard, to verify (1) Expand the list of Category B addition, we propose to direct that
system performance under contingency contingencies, and differentiate between NERC develop modifications to the
conditions involving the failure of a an element (i.e., circuit) and a system of Reliability Standard, as discussed
single element with or without a fault. elements (i.e., multi-circuit line or DC below.
The Reliability Standard requires that bi-pole); (2) review Category B and C 1079. The Commission notes that, like
planned outages of transmission contingencies based not only on TPL–001–0, TPL–002–0 requires an
equipment be considered for those probability, but also on reliability risk entity assessing system performance to
demand levels for which planned and consider including risk cover ‘‘critical system conditions and
outages are performed. When system quantification methodology in the study years’’ as deemed appropriate by
simulations indicate that the system Reliability Standards; and (3) clarify the entity performing the study, but
cannot meet the performance footnote (b) of Table 1 to address staff’s does not specify the rationale for
requirements stipulated in the standard, concern. determining critical system conditions
a documented plan to achieve system 1074. CenterPoint disagrees with staff and study years. The Commission
performance requirements must be that planners should specifically plan therefore proposes to direct NERC to
prepared. The specific study elements for planned outages plus unplanned modify TPL–002–0 to require that
selected from each of the categories for outages. According to CenterPoint, it critical system conditions be
assessments are subject to approval by suffices that operators currently determined in the same manner as we
the associated regional reliability schedule planned outages at times when propose with regard to TPL–001–0. The
organization. reliability risk is minimized. Further, it Commission also proposes that the
ii. Staff Preliminary Assessment contends that planning for one planned results of these studies be documented
1070. Staff stated that its general outage in addition to outages prescribed to support the selection of critical
concerns regarding stressing the system in the TPL Reliability Standards would system conditions and study years used
during simulations and event-based make an N–1 requirement effectively an in assessing system performance. We
contingencies apply to TPL–002–0. In N–2 requirement. Based on that also note that load models used in
other words, TPL–002–0 does not premise, it argues that no utility has system studies have a significant impact
require sensitivity studies to define software to exhaustively test every on system performance, particularly as
critical conditions and does not address they relate to the dynamic performance
the unanticipated failure of some single 327 Footnote (b) reads states ‘‘Planned or of the system. The Commission
controlled interruption of electric supply to radial proposes that the documentation of
elements in the Bulk-Power System that customers or some local Network customers,
result in subsequent loss of multiple system studies include a description of
connected to or supplied by the Faulted element or

elements. Staff also stated that footnotes by the affected area, may occur in certain areas the load models used including
associated with Table 1, which are without impacting the overall reliability of the supporting rationale for their use. The
interconnected transmission systems. To prepare Commission expects the ERO to provide
meant to aid the interpretation of the for the next contingency, system adjustments are
permitted, including curtailments of contracted
consistency and quality control in these
326 The performance requirements are set forth in Firm (non-recallable reserved) electric power interpretations and that over time one or
Category B of Table I of the Reliability Standard. transfers.’’ more performance metrics would be
developed to assess the rigor of these applicable to TPL–002–0. This states, in purposes of clarity, the Commission
evaluations. part, ‘‘[a]pplicable ratings may include proposes to require that the phrase ‘‘to
1080. The Commission commends Emergency Ratings applicable for short prepare for the next contingency, system
NERC’s initiative on improving the TPL durations as required to permit adjustments are permitted, including
standards and proposes that NERC operating steps necessary to maintain curtailments of contracted Firm (non-
modify the Reliability Standard to system control.’’ 329 TIS states that on recallable reserved) electric power
expand category B to achieve the basis of its review of criteria, transfers’’ be deleted from footnote (b).
consistency in continent-wide methods and practices used for system This statement is more appropriate for
Reliability Standards. design, planning and analysis across the Category C events and is already
1081. With regard to CenterPoint’s NERC reliability regions, the footnote is captured by footnote (c) to Table 1,
concerns, we disagree that planned intended to provide flexibility to the which is applicable to Category C
outages would be considered the same responsible planning entity to decide events.
as an unexpected contingency that the appropriate planning response. That 1085. While all commenters agree
would effectively turn an N–1 scenario response could be to plan for a facility with staff on the need to clarify footnote
into an N–2 scenario. Further, the addition or enhancement, or to develop (b), the Commission has proposed above
studies/assessments should recognize and document an operating guide or that footnote (b) be clarified to allow no
that planned outages are not scheduled procedure that can be reliably firm load or firm transactions to be
for peak periods and when required the implemented to achieve the required interrupted except consequential load
system is adjusted to accommodate the system performance for the event in loss. NERC identifies another concern
planned outage. However, we do not question. In the latter case, the operating with its example, specifically, the
believe that fact justifies ignoring action must be completed in sufficient acceptable magnitude and duration of
planned outages altogether, as suggested time to return the system to a secure consequential load loss. The
by CenterPoint. While TPL–002–0 operating state with no additional loss Commission believes that the Reliability
requires consideration of planned of firm load. The Commission proposes Standard should provide some limits on
outages at those demand levels for to require that the phrase ‘‘permit the magnitude and duration of
which planned outages are performed, it operating steps necessary to maintain consequential load loss. While the
does not address situations in which system control’’ be clarified to state that Commission does not propose to require
critical equipment, such as a the operating steps required to relieve any specific maximum consequential
transformer or phase angle regulator, emergency loadings and return the load loss level or maximum load loss
may be unavailable for a prolonged system to a normal state do not include duration at this time, we do propose to
period. Including such a requirement firm load shedding. The Commission require that those values be documented
would ensure the coordination of also proposes that these required by all users of the Bulk-Power System.
contingency plans, including the operating steps be identified and be 1086. MRO points to the same
entity’s spare equipment strategy, to capable of returning the system to the ambiguity in Table 1 that staff identified
return facilities to service in a timely normal secure state within the 30 in the Staff Preliminary Assessment.
manner as required for reliability. minute allowable period. The Commission interprets Table 1 to
Therefore, the Commission proposes 1084. Footnote (b) to Table 1 raises specify no permitted loss of demand or
that the ERO modify the Reliability three issues that need to be addressed. curtailment of firm transfers for
Standard by developing a new Two relate to the use of planned or Category B contingencies. If the
requirement that would include the controlled load interruptions under Reliability Standard intended to use
reliability impact of an entity’s existing certain circumstances, and the third Planned/Controlled demand loss, it
spare equipment strategy, address the relates to the use of system adjustments would have stated such, as they do in
unavailability of long lead time critical including curtailment of firm transfers other portions of the same table. It is
facilities. Critical facilities are those to prepare for the next contingency. footnote (b) that introduces the
facilities that impact IROLs and NERC and TAPS agree with the Staff ambiguity, and the Commission
deliverability of generation to firm load. Preliminary Assessment that footnote proposes that the footnote be viewed as
1082. Order No. 661 requires all wind (b) of Table 1 could be enhanced with identifying rare exceptions, such as
generators to remain online during regard to its intended interpretation for radial customers.
voltage disturbances for specified time contingencies associated with 1087. The Commission proposes to
periods and associated voltage levels. transmission lines used to serve or require that the purpose statement of
Category B and some Category C events supply load. NERC states that it does TPL–002–0 be modified to reflect the
capture these disturbances for planning not consider shedding load acceptable specific goal of the Reliability Standard.
study purposes.328 We understand that for single contingency events. The 1088. While the Commission has
the TPL Reliability Standards implicitly Commission agrees and thus proposes to identified a number of concerns with
require all generators to ride through require NERC to modify footnote (b) to regard to TPL–002–0, this proposed
these same types of voltage disturbances state that load shedding for a single Reliability Standard serves an important
and remain in service after the fault is contingency is not permitted except in purpose by ensuring that the future
cleared. The Commission proposes to very special circumstances where such Bulk-Power System is planned to meet
direct NERC to modify TPL–002–0 to interruption is limited to the firm load the system performance requirements of
explicitly state this requirement. associated with the failure a system, with the loss of one element.
1083. Several commenters agree with (consequential load loss).330 For Further, the Requirements set forth in
staff that a number of footnotes of Table TPL–002–0 are sufficiently clear and
1 could be enhanced. We agree with TIS objective to provide guidance for
329 NERC TIS Report at 15.

with respect to footnote (a), which is 330 Load associated with the failure could be compliance.
radial load supplied by the transmission element 1089. Accordingly, giving due weight
328 Interconnection for Wind Energy, Order No. that is assumed to be removed from service, load to the technical expertise of the ERO
661, 70 FR 34993 (June 16, 2005), FERC Stats. & supplied from separate transmission elements that
Regs. ¶ 31,186 (2005), order on reh’g, Order No. are both removed from service due to a single
and with the expectation that the
661–A, 70 FR 75,005 (Dec. 19, 2005), FERC Stats. failure, or load that is tapped onto a single Reliability Standard will accomplish the
& Regs. ¶ 31,198 (2005). transmission element. purpose represented to the Commission
by the ERO and that it will improve the conditions to be simulated. The specific critical system conditions and study
reliability of the nation’s Bulk-Power study elements selected from each of the years. The Commission therefore
System, the Commission proposes to categories for assessments, including the proposes that NERC modify TPL–003–0
approve Reliability Standard TPL–002– subset of Category C contingencies to be to require that critical system conditions
0 as mandatory and enforceable. In evaluated, require approval by the be determined in the same manner
addition, pursuant to section 215(d)(5) associated regional reliability discussed above with regard to TPL–
of the FPA and § 39.5(f) of our organization. 001–0. The Commission also proposes
regulations, the Commission proposes to that the results of these studies be
direct that NERC submit a modification documented to support the selection of
to TPL–002–0 that: (1) Requires that 1092. Commission staff stated in its critical system conditions and study
critical system conditions be Staff Preliminary Assessment that TPL– years used in assessing system
determined in the same manner as we 003–0 does not require sensitivity performance. Also the Commission
propose to require for TPL–001–0; (2) studies to define critical conditions and notes that load models used in system
requires the inclusion of the reliability study years, does not base its studies have a significant impact on
impact of the entities’ existing spare contingencies on probable events, and system performance, particularly as they
equipment strategy; (3) explicitly as a result has contingencies included relate to the dynamic performance of the
requires all generators to ride through that would be more appropriate in system. The Commission proposes that
the same set of Category B and C Category B contingencies treated under the documentation of system studies
contingencies as required for wind TPL–002–0. Staff also stated that include a description of the load models
generators in Order No. 661; (4) requires footnotes associated with TPL–003–0 in used including supporting rationale for
documentation of load models used in Table 1, which are meant to aid the their use.
system studies and supporting rationale interpretation of the performance 1097. Several commenters agree with
for their use; (5) clarifies the phrase requirements, are ambiguous and Commission staff that a number of
‘‘permit operating steps necessary to require clarification to permit footnotes in Table 1 to the Reliability
maintain system control;’’ and (6) appropriate and consist application. Standard could be enhanced. The
clarifies footnote (b), as discussed 1093. Staff noted that the purpose reference to ‘‘controlled interruption’’ of
above. statement for TPL–003–0 is identical to load in regard to footnote (c), which is
those for TPL–001, TPL–003 and TPL– applicable to TPL–003–0, suggests the
e. System Performance Following Loss 004, although the Reliability Standard possibility of automatic load shedding
of Two or More Elements (TPL–003–0) has a different goal and different through the use of Special Protection
i. NERC Proposal requirements. Staff further noted that Systems or safety nets such as Under
while the Reliability Standard defines Voltage Load Shedding Schemes.
1090. NERC states that proposed various categories of conditions to be Alternatively, a defined manual load
Reliability Standard TPL–003–0 ensures simulated, the specific study elements interruption could be used to deal with
that the future Bulk-Power System is selected from each of the categories for short-time emergency thermal
planned to meet the system performance assessments are subject to approval by overloads. The Commission proposes to
requirements of a system with the loss the associated regional reliability require that the ERO modify footnote (c)
of multiple elements. It does this by organization, even though they may to provide specificity regarding the use
requiring that the transmission planner impact neighboring utilities and of the term ‘‘controlled interruption’’ of
and the planning authority annually reliability coordinators. load. Further, the Commission proposes
evaluate and document the ability of its that, in modifying TPL–003–0, the ERO
transmission system to meet the iii. Comments require documentation and
performance requirements of Category C 1094. ISO/RTO Council comments identification of the firm load that is
contingencies specified in Table 1 (i.e., that Requirement 2 of TPL–003–0 does subject to the controlled interruption.
events resulting in the loss of two or not clearly define ‘‘simulation’’ and To avoid any undue negative impact on
more elements) for both the near-term does not define ‘‘inability to respond.’’ competition, third-party impact studies
and the longer-term planning horizons. In addition, several commenters note would be permitted to implement the
TPL–003–0 requires the preparation of a that the footnotes in Table 1 of the TPL same or less controlled load
documented plan to achieve the group of Reliability Standards could be interruption as used by the transmission
necessary performance requirements if enhanced, including footnote (c) of owner.
the system is unable to meet the Table 1. 1098. The performance requirements
Category C performance criteria. for Category C events stipulate ‘‘no
1091. TPL–003–0 applies to each iv. Commission Proposal cascading outages.’’ The NERC
planning authority and transmission 1095. The Commission proposes to Transmission Issues Subcommittee
planner. They must demonstrate approve proposed Reliability Standard identified a concern regarding the
annually through valid assessments that TPL–003–0 as a mandatory and determination of whether cascading
their portion of the interconnected enforceable Reliability Standard. In outages result in the evaluation of
transmission system is planned to meet addition, we propose to direct that Category C events.331 This concern
the performance requirements of NERC develop modifications to the relates to the use of thermal overload or
Category C with all transmission Reliability Standard, as discussed low voltage proxies to judge the
facilities in service over a planning below. likelihood of subsequent line or
horizon that takes into account lead 1096. The Commission notes that, like generator trips. The Commission
times for corrective plans. The TPL–001–0 and TPL–002–0, in proposes to require NERC to modify the
Reliability Standard also requires the assessing system performance, TPL– Reliability Standard to require the
applicable entities to consider planned 003–0 requires entities to cover ‘‘critical applicable entities to define and
outages of transmission equipment for system conditions and study years’’ as document the proxies necessary to
those demand levels for which they deemed appropriate by the entity simulate cascading outages and to
perform such outages. The Reliability performing the study, but does not
Standard defines various categories of specify the rationale for determining 331 See NERC TIS Report.
require that the ERO approve the of TPL–001–0); (2) clarifies footnote (c) staff and control room operators. Staff
proxies. as discussed above; (3) requires the noted that TPL–004–0 does not address
1099. Category C3 of TPL–003–0 applicable entities to define and scenarios that are equal to or more
involves a situation in which two single document the proxies necessary to severe than actual weather events, such
contingencies occur, with manual simulate cascading outages; and (4) as hurricanes that affect the Southern
system adjustments permitted after the tailors the purpose statement to reflect United States and ice storms in the
first contingency to prepare for the next the specific goal of the Reliability, as north.
one. Proposed Reliability Standard IRO– discussed above. iii. Comments
005–0 requires that the manual system
adjustments be implemented as soon as f. System Performance Following 1107. ISO/RTO Council believes that
possible and no later than 30 minutes Extreme Events (TPL–004–0) Requirement R1 of TPL–004–0 needs to
after the first contingency has occurred. i. NERC Proposal be revised to provide better definition of
Should the second contingency occur terms and obligations and requires
1103. NERC states the proposed review to determine whether it is too
before the manual system adjustments Reliability Standard TPL–004–0 ensures
can be completed, the local area and prescriptive in specifying responses to
that the future Bulk-Power System is extreme contingencies. ISO/RTO
potentially the system would be evaluated to assess the risks and
exposed to risk of cascading outages. Council also believes that before
consequences of an extreme event Requirement R2 can be enforced,
Recognizing this risk and its potential involving the loss of multiple elements.
consequences, some entities plan and regional seasonal assessments should be
It does this by requiring that the provided to the regional reliability
operate their systems so that they are transmission planner and the planning
able to withstand the simultaneous organizations.
authority to evaluate and document 1108. MRO does not believe that it is
occurrence of the two contingencies for annually the risks and consequences of
major load pockets.332 The Commission practical to develop deterministic
Category D contingencies (i.e., extreme criteria for extreme events. MRO and the
solicits comments on the value and events resulting in loss of two or more
appropriateness of including such a New York Commission state that
elements or cascading) for the near-term Reliability Standards should not require
requirement in TPL–003–0. (five-year) planning horizon.
1100. The Commission also notes that improvements that are not justified by
1104. TPL–004–0 applies to each very low probability events. However, a
TPL–003–0 would be enhanced if its
planning authority and transmission Reliability Standard should require
purpose statement were tailored to
planner. Each must demonstrate assessment and consideration of actions
reflect the specific goal of the Reliability
annually through valid assessments that necessary to resolve such events.
Standard and that each requirement
its portion of the interconnected MidAmerican recommends that
should correspond with one or more
transmission system is evaluated for the transmission planning Reliability
Measures and each Measure should
risks and consequences of a number of Standards permit probabilistic
correspond to a Level of Non-
each of the extreme contingencies of approaches to responding to extreme
Compliance.
1101. While the Commission has Category D with all transmission events and events in Category D of Table
identified a number of concerns with facilities in service over a planning 1. While the probability of extreme
regard to TPL–003–0, this proposed horizon that takes into account lead events often does not warrant system
Reliability Standard serves an important times for corrective plans. TPL–004–0 improvements, it does make sense to
purpose by ensuring that the future also requires that planned outages of require consideration of mitigating
Bulk-Power System is planned to meet transmission equipment be considered actions or improvements whose cost is
the system performance requirements of for those demand levels for which justified by the expected benefits.
a system with the loss of multiple planned outages are performed. It 1109. ReliabilityFirst recommends
elements. Further, the Requirements set defines various categories of conditions that consideration should be given to
forth in TPL–003–0 are sufficiently clear to be simulated. The associated regional establishing some record of studies and
and objective to provide guidance for reliability organization must approve identifying system weaknesses.
compliance. the specific study elements selected CenterPoint states it does not believe
1102. Accordingly, giving due weight from each of the categories for that companies should be required to
to the technical expertise of the ERO assessment, including the subset of share planning assessments because it
and with the expectation that the Category D contingencies to be relates more to open access tariff
Reliability Standard will accomplish the evaluated. concerns than reliability. In addition,
purpose represented to the Commission ii. Staff Preliminary Assessment sharing assessments would promote the
by the ERO and that it will improve the unnecessary disclosure of critical energy
1105. ‘‘Extreme events’’ are low infrastructure information.
reliability of the nation’s Bulk-Power
probability but high impact events. Staff
System, the Commission proposes to iv. Commission Proposal
noted that while the Reliability
approve Reliability Standard TPL–003–
Standards require assessments of 1110. The Commission proposes to
extreme events, documentation of the approve proposed Reliability Standard
results and submission to the regional TPL–004–0 as a mandatory and
reliability organization, they do not enforceable Reliability Standard. In
require that consideration be given addition, we propose to direct that
either to reducing the probability of the NERC develop modifications to the
to TPL–003–0 that: (1) Requires that
loss of multiple elements or mitigating Reliability Standard, as discussed
critical system conditions be

the impact. below.
determined by conducting sensitivity
1106. Staff also stated that this 1111. The Commission notes that, like
studies (as elaborated in our discussion
proposed Reliability Standard does not Reliability Standards TPL–001–0
332 Two entities are Consolidated Edison require that assessment results be through TPL–003–0, TPL–004–0
Company of New York and Public Service Electric shared with impacted entities or requires entities assessing system
and Gas. communicated to operations planning performance to cover ‘‘critical system
conditions and study years’’ the entity to operations planning staff and control g. Regional and Interregional Self-
performing the study deems room operators. While CenterPoint Assessment Reliability Reports (TPL–
appropriate, but it does not specify the disfavors such information sharing, we 005–0)
rationale for determining critical system believe that sharing assessment results i. NERC Proposal
conditions and study years. The would serve an important reliability
Commission therefore proposes that purpose as it would provide system 1118. NERC states that proposed
NERC modify TPL–004–0 to require that operators and impacted entities with an Reliability Standard TPL–005–0 ensures
critical system conditions be opportunity to mitigate the identified that each regional reliability
determined in the same manner as impact. However, we agree with organization conducts reliability
discussed above with regard to TPL– assessments of its existing and planned
CenterPoint that any such requirement
001–0. The Commission also proposes regional bulk electric system annually
should make clear that that critical
that the results of these studies be by requiring the regional reliability
documented to support the selection of energy infrastructure information
should not be unnecessarily disclosed. organization to assess and document the
critical system conditions and study performance of its power system for the
years used in assessing system 1115. The Commission also notes that current year, the next five years, and to
performance. Also the Commission TPL–004–0 would be enhanced if its analyze trends for the longer-term
notes that load models used in system purpose statement would be tailored to planning horizons.
studies have a significant impact on reflect the specific goal of the standard.
system performance, particularly as they In addition, the Commission proposes ii. Staff Preliminary Assessment
relate to the dynamic performance of the that each requirement should 1119. Staff noted that the Reliability
system. The Commission proposes that correspond to one or more measures and Standard identifies the regional
the documentation of system studies each measure should correspond to a reliability organization as the applicable
include a description of the load models level of non-compliance. entity.
used including supporting rationale for
their use. 1116. While the Commission has iii. Comments
1112. MidAmerican and MRO agree identified a number of concerns with
with Commission staff that regard to TPL–004–0, this proposed 1120. NYSRC recommends that this
consideration must be given to Reliability Standard serves an important proposed Reliability Standard be
mitigating actions associated with purpose by ensuring that the future withdrawn, as it anticipates that
impacts of extreme events. Bulk-Power System is evaluated to regional reliability organizations will
MidAmerican proposes using an assess the risks and consequences of an develop regional transmission planning
approach to take into account extreme event involving the loss of standards due to regional differences
probability, impact and value to multiple elements. Further, the specific to their region. CenterPoint also
customers of reliability. MRO cautions Requirements set forth in TPL–004–0 suggests that the proposed Reliability
against requiring improvements that are sufficiently clear and objective to Standard be eliminated.
cannot be justified. NERC also states provide guidance for compliance. 1121. ISO/RTO Council states that the
that Reliability Standards should not term and extent of assessment, as well
require compliance with a high-impact, 1117. Accordingly, giving due weight
as the study years, are not appropriately
low probability contingency imposed on to the technical expertise of the ERO
defined; the process for determining
a low probability base case. The and with the expectation that the
load levels needs to be standardized;
Commission agrees that the Reliability Reliability Standard will accomplish the and local area networks and system
Standard should not require purpose represented to the Commission adjustments need to be specifically
improvements for low probability by the ERO and that it will improve the defined.
events that cannot be justified. reliability of the nation’s Bulk-Power
However, the Commission proposes that System, the Commission proposes to iv. Commission Proposal
NERC modify TPL–004–0 to require the approve Reliability Standard TPL–004– 1122. Consistent with our discussion
identification of options for reducing 0 as mandatory and enforceable. In in the Common Issues section above, the
the probability or impacts of extreme addition, pursuant to section 215(d)(5) Commission will not propose any action
events that cause cascading outages. The of the FPA and § 39.5(f) of our on TPL–005–0, as it applies only to
Commission also proposes that these regulations, the Commission proposes to regional reliability organizations.
options be documented together with a direct that NERC submit a modification Accordingly, the Reliability Standard
supporting rationale for cases where to TPL–004–0 that: (1) Requires that will remain pending at the Commission.
such options were not pursued. critical system conditions be
1113. In determining the range of The Commission believes that, in the
determined in the same manner as long-run, the Regional Entities should
extreme events to be assessed, staff
noted that a number of recent high risk proposed for TPL–001–0; (2) requires be responsible for conducting reliability
events, such as the hurricanes affecting the identification of options for assessments of the existing and planned
the southern United States and the ice reducing the probability or impacts of regional system. However, during the
storm in the north, resulted in a greater extreme events that cause cascading; (3) current period of transition, the regional
impact on the Bulk-Power System in requires that, in determining the range reliability organizations should
terms of the number of elements forced of extreme events to be assessed, the continue to perform this role as they
out of service than events listed in TPL– contingency list of Category D be have in the past.
004–0. The Commission proposes that expanded to include recent events; and 1123. In addition, the Commission
the contingency list of Category D be (4) tailors the purpose statement to agrees with the ISO/RTO Council
expanded to include similar events. reflect the specific goal of the Reliability regarding the shortcomings in the
1114. Staff noted that the Reliability Standard. Reliability Standard it has identified
Standard does not explicitly require that and proposes that NERC address these
the results of assessments be shared issues in the revision to the Reliability
with impacted entities or communicated Standard.
h. Assessment Data From Regional limits, thereby protecting transmission, voltage collapse.334 Staff noted that
Reliability Organizations (TPL–006–0) generation, distribution, and customer voltage instability has been a common
i. NERC Proposal equipment and the reliable operation of causal factor in major power outages
the Interconnection. The Voltage and worldwide and voltage magnitudes
1124. NERC states that proposed Reactive Control group of Reliability alone are poor indicators of voltage
Reliability Standard TPL–006–0 ensures Standards is intended to replace the stability.
that the data necessary to conduct existing VAR–001–0 and consists of two 1133. The Staff Preliminary
reliability assessments is available by proposed Reliability Standards, VAR– Assessment explained that the proposed
requiring the regional reliability 001–1 and VAR–002–1, with new Reliability Standard does not require
organization to provide NERC with Requirements. These two new proposed applicable entities to perform operations
Bulk-Power System data, reports, Reliability Standards have been planning studies that would identify the
demand and energy forecasts, and other submitted by NERC as part of the minimum permissible pre-contingency
information necessary to assess August 28, 2006 Supplemental Filing voltage levels and reactive power
reliability and compliance with NERC for Commission review. Because there is reserves to ensure stable post-
Reliability Standards and relevant significant overlap between VAR–001–0 contingency voltages. In addition, the
regional planning criteria. and version 1 Reliability Standards, the standard does not require similar
ii. Staff Preliminary Assessment Commission will address them voltage stability assessments to be
collectively below, giving due carried out periodically during real-time
1125. Staff noted that the Reliability operations so that system operators can
consideration to the new Requirements
Standard identifies the regional continuously respond to changing
in addressing the proposed disposition
reliability organization as the applicable system conditions.
of VAR–001–1 and VAR–002–1.
entity. 1134. Because voltage and reactive
b. Voltage and Reactive Control (VAR– control is an integral part of
iii. Comments
001–1 and VAR–002–1) Interconnection Reliability Operating
1126. NYSRC recommends that this Limits and voltage collapse can result in
Reliability Standard be withdrawn i. NERC Proposal
widespread cascading outages, staff
because it anticipates that regional 1130. NERC explains that VAR–001– expressed concern that reliable
reliability organizations will develop 1 requires the transmission operator to operation of the Bulk-Power System
regional transmission planning monitor and control voltage levels, requires that reliability coordinators be
standards based on regional differences reactive flows, and reactive resources, in authorized to direct and coordinate
specific to their regions. CenterPoint order to keep these parameters within voltage and reactive control among
also suggests eliminating this Reliability their reliability limits. Further, it operating entities in an Interconnection,
Standard. requires a generator operator to provide and accordingly this standard should
1127. ISO/RTO Council suggests that, critical operating data to its also apply to reliability coordinators.
for the ERO to be successful at assessing transmission operator, and to maintain Similarly, staff noted that Requirement
overall reliability, it must identify what generator field excitation at proper R5, which requires each purchasing-
data and reports it needs to review in levels. The proposed Reliability selling entity to arrange for reactive
order to ensure that adequate planning Standard would apply to transmission resources to satisfy its reactive
is being conducted. operators, generator operators and requirements identified by its
iv. Commission Proposal purchasing-selling entities. transmission service provider, does not
1131. In its August 28, 2006 currently apply to load-serving entities,
1128. Consistent with our discussion even though a load-serving entity is
in the Common Issues section above, the Supplemental Filing, NERC indicates
responsible for significantly more load
Commission will not propose any action that VAR–001–1 includes three new
than a purchasing-selling entity.
on TPL–006–0, as it applies only to Requirements, designated R3, R4 and
Therefore, the Reliability Standard
regional reliability organizations. R11, which apply to transmission
should also apply to load-serving
Accordingly, the Reliability Standard operators. Requirement R9 from VAR–
entities.
will remain pending at the Commission. 001–0, which applies to generator
1135. Finally, staff noted that the
The Commission believes that, in the operators, is now replaced with five
proposed reliability standard does not
long-run, the Regional Entities should Requirements in VAR–002–1. Both
address Recommendation No. 23 of the
be responsible for providing NERC with Reliability Standards include Measures
Blackout Report, ‘‘[s]trengthen reactive
Bulk-Power System data, reports, and Levels of Non-Compliance.
power and voltage control practices in
demand and energy forecasts, and other ii. Staff Preliminary Assessment all NERC regions.’’ 335 However, staff
information necessary to assess noted that NERC did respond to the
reliability and compliance with NERC 1132. The VAR Reliability Standard recommendation by establishing the
Reliability Standards and relevant requires each transmission owner to Transmission Issues Subcommittee
regional planning criteria. However, ‘‘acquire sufficient reactive resources (TIS) which completed an evaluation of
during the current period of transition, within its areas to protect the voltage reactive power planning and voltage
the regional reliability organizations levels under normal and Contingency control practices.
should continue to perform this role as conditions’’ and ‘‘maintain system and
they have in the past. Interconnection voltages within iii. Comments
13. VAR: Voltage and Reactive Control established limits.’’ 333 The Staff 1136. NERC states that the proposed
Preliminary Assessment stated that reactive power and voltage control
a. Overview these Requirements may not be

1129. The Version 0 Voltage and sufficient to assure reliable operation 334 Staff Preliminary Assessment at 118 (although
Reactive Control (VAR) Reliability when operating power systems under the Staff Preliminary Assessment addresses
concerns regarding the version 0 VAR Reliability
Standard VAR–001–0 is intended to conditions that make them vulnerable to Standard, many of these same concerns apply to the
maintain Bulk-Power System facilities version 1 VAR Reliability Standards as well).
within voltage and reactive power 333 See VAR–001–1, Requirements R2 and R8. 335 Blackout Report at 160.
Reliability Standard is adequate and transmission owner to ‘‘acquire stability analysis in real-time operations
necessary to protect the reliability of the sufficient reactive resources within its is not directly addressed. Because of its
Bulk-Power System. It points out that, area to protect the voltage levels under importance to Bulk-Power System
in addition to the proposed Reliability normal and Contingency conditions’’ 336 reliability, as discussed in section ii
Standard, a number of other Version 0 and ‘‘maintain system and above, the Commission proposes that it
standards in the IRO, TOP, and TPL Interconnection voltages within be directly addressed in VAR–001–1.
series address reactive power and established limits.’’ 337 In the 1142. Section 215(b) of the FPA
voltage control requirements and Commission’s view, technical provides that users, owners and
suggests that the proposed Reliability requirements containing terms such as operators of the Bulk-Power System
Standards should be viewed in their ‘‘established limits’’ or ‘‘sufficient must comply with a Commission-
entirety in assessing their adequacy. reactive resources’’ are not definitive approved Reliability Standard. As
1137. Nonetheless, NERC states that enough to address voltage instability discussed above, NERC’s proposed
staff is correct that additional and to ensure reliable operations.338 As Reliability Standards identify the
consideration regarding the an example of the Commission’s entities to which a particular Reliability
development of the Reliability Standard concept of a more effective requirement, Standard would apply according to the
related to reactive power and voltage NERC should consider WECC’s NERC Functional Model. According to
control, reactive reserves, and the Reliability Criteria, which contain NERC’s proposal, VAR–001–1 would
related subject of under-voltage load specific and definitive technical apply to transmission operators and
shedding is required. It explains that, in requirements on voltage and margin purchasing-selling entities. In
response to the Blackout Report application.339 The Commission’s view Requirement R5, purchasing-selling
recommendations related to reactive is also consistent with the NERC entities are required to arrange for
power and voltage control, the NERC Transmission Issue Subcommittee’s reactive resources to satisfy their
Planning Committee prepared a report findings in its ‘‘Evaluation of Reactive reactive requirements as identified by
titled ‘‘Evaluation of Reactive Power Power Planning and Voltage Control their transmission service provider.
Planning and Voltage Control Practices.’’ 340 The Commission notes Because purchasing-selling entities are
Practices,’’ which was accepted by the that VAR–001–1, while adding three either self-providing or purchasing the
NERC board of Trustees in May 2005. new Requirements that apply to reactive resources, they are clearly users
NERC states that it is committed to transmission operators regarding voltage of the Bulk-Power System.
developing, as a high priority, new and reactive control, still lacks the 1143. The Commission believes that
Reliability Standards that will specific and technical Requirements on NERC’s proposed applicability
incorporate the recommendations of the voltage and margin application to provision in VAR–001–1, in terms of the
Planning Committee’s report. NERC prevent voltage instability.341 Therefore, Functional Model, should be expanded
does not agree with the Staff the Commission proposes directing to include ‘‘reliability coordinators’’ and
Preliminary Assessment concerning the NERC to modify VAR–001–1 to include ‘‘load-serving entities.’’ According to
lack of applicability of the standard to more detailed and definitive NERC’s petition, ‘‘load-serving entities’’
load-serving entities. NERC contends requirements on ‘‘established limits’’ are energy providers for end use
that a load-serving entity that purchases and ‘‘sufficient reactive resources’’ to customers, and NERC’s functional
outside resources to serve its load and prevent voltage instability and to ensure model defines the load serving function
uses transmission service to import that reliable operations. These requirements as responsible for ‘‘secur[ing] energy
energy acts as a purchasing-selling for ensuring voltage stability shall be and transmission service (and related
entity and must arrange reactive support included in operations planning studies Interconnected Operations Services) to
services pursuant to VAR–001–0. and real-time assessment in addition to serve the end-use customer.’’ 342
1138. ReliabilityFirst, on the other real time operation. Reliability coordinators and load-
hand, agrees with staff’s concern that 1141. While real-time operations are serving entities are operators and users
the proposed Reliability Standard covered by other standards, the of the bulk-power system respectively,
should apply to load-serving entities requirement to perform periodic voltage and should be included in the
and reliability coordinators. As a applicability of this standard as
general matter and in the specific 336 VAR–001–1, Requirement R2. discussed in more detail below.
context of the proposed Reliability 337 VAR–001–1, Requirement R8. 1144. In a complex power grid such
Standard, ReliabilityFirst states the 338 See Staff Preliminary Assessment at 118, as the one which exists in North
work by NERC’s drafting team to citing Blackout Report at 36 (‘‘voltage magnitude America, reliable operations can only be
alone is a poor indicator of voltage stability’’). ensured by coordinated efforts from all
develop missing compliance elements 339 WECC’s Reliability Criteria at 32 states ‘‘For
must be expedited. In addressing staff’s operating entities in long term planning,
transfer paths, post-transient voltage stability is
primary issues with this standard, required with the path modeled at a minimum of operational planning and real time
ReliabilityFirst states that acceptable 105% of the path rating (or Operational Transfer operations. To that end, the Staff
variations in voltage used by operating Capability) for system normal conditions (Category Preliminary Assessment recommended
A) and for single contingencies (Category B). For (and ReliabilityFirst concurred) that the
personnel should be minimized by the multiple contingencies (Category C), post-transient
development of more defined terms. voltage stability is required with the path modeled applicability of this proposed Reliability
at a minimum of 102.5% of the path rating (or Standard extend to both reliability
iv. Commission Proposal Operational Transfer Capability). coordinators and load-serving entities.
340 See http://www.NERC.com/pub/sys/all_updl/
1139. The Commission proposes to Since reliability coordinators are the
pc/tis/TIS_Reactive_Recom7a_BOTapprvd_050305.
approve VAR–001–1 as mandatory and 341 VAR–001–1 Requirement R3 requires
highest level of authority overseeing the
enforceable. In addition, we propose to reliability of the Bulk-Power System, it
transmission owners to specify criteria that exempt

direct that NERC develop modifications generators from complying with Requirement R4. is important to include them as an
to the Reliability Standard, as discussed Requirement R4 requires transmission owners to applicable entity to maintain adequate
below. specify a voltage or reactive power schedule to be voltage and reactive resources. As for
maintained by generators. Requirement R11
1140. As explained in the Staff requires transmission operators to provide load-serving entities, NERC states that
Preliminary Assessment, the proposed documentation to generator owners on necessary
Reliability Standard requires a step-up transformer tap changes. 342 NERC glossary at 9.
VAR–001–0 (and NERC’s statement Reliability Standard will accomplish the Bulk-Power System in section 215 of the
applies equally to VAR–001–1) is purpose represented to the Commission FPA and the NERC definition of bulk
indirectly applicable to a load-serving by the ERO and that it will improve the electric system could create a
entity in its role as a purchasing-selling reliability of the nation’s Bulk-Power discrepancy that results in reliability
entity to the extent that it purchases System, the Commission proposes to ‘‘gaps.’’ 344 Further, in its discussion of
outside resources to serve its load and approve Reliability Standard VAR–001– planning (TPL) Reliability Standards,
uses transmission service to import that 1 as mandatory and enforceable. In staff expressed concern regarding the
energy. Although the Commission addition, pursuant to section 215(d)(5) statutory definition of Reliable
agrees with this statement to the extent of the FPA and § 39.5(f) of our Operation as it would impact the
that a load-serving entity is purchasing regulations, the Commission proposes to contingencies to be considered in
point-to-point transmission service to direct that NERC submit a modification setting system performance expectations
serve its load, it is not clear that a load- to VAR–001–1 that: (1) Includes set forth in the TPL standard.
serving entity would become a detailed and definitive requirements on c. Comments
purchasing-selling entity when utilizing ‘‘established limits’’ and ‘‘sufficient
network service to meet its load reactive resources’’ as discussed above, 1153. Commenters note that some
obligations. The Commission is and identifies acceptable margins above glossary terms are not consistent with
interested in comments concerning the voltage instability points; (2) the definition for those same terms in
NERC’s assertion that all load serving includes Requirements to perform the ERO’s Rules of Procedure. They
entities are also purchasing-selling voltage stability assessments point to the definition of regional
entities. periodically during real-time operations; reliability organization and load serving
1145. We propose directing NERC to and (3) expands the applicability to entity as examples. Comments on the
add reliability coordinators and load- include reliability coordinators and term Bulk-Power System and Reliable
serving entities to the existing list of load-serving entities. Operation are included with the TPL
applicable entities for VAR–001–1 for 1149. The Commission commends chapter.
added clarity. VAR–001–1 recognizes NERC and industry for their efforts in d. Commission Proposal
that energy purchases of purchasing- expanding on Requirement R9, which 1154. The Commission believes that
selling entities can increase reactive applied to generator operators in VAR– the NERC glossary is an important
power consumption on the Bulk-Power 001–0, and making it into several supplement to understanding the
System and that they must supply what detailed Requirements in VAR–002–1, mandatory and enforceable Reliability
they consume. Load-serving entities also which apply to generator operators and Standards. While we are generally
consume reactive power. We note that generator owners, complete with satisfied with the NERC glossary, we
in many cases load response and load- Measures and Levels of Non- believe that it is appropriate that NERC
side investment can reduce the need for Compliance to ensure appropriate modify the glossary to include terms
reactive power capability in the generation operation to maintain defined in section 215(a) of the FPA.
system.343 Therefore, we propose to network voltage schedules. Further, in the general Applicability
include controllable load among the 1150. Accordingly, the Commission discussion we explained our specific
reactive resources to satisfy reactive believes that Reliability Standard VAR– concerns regarding potential differences
requirements. 002–1 is just, reasonable, not unduly
1146. We are also interested in between the statutory term Bulk-Power
discriminatory or preferential, and in System and the NERC term bulk electric
comments on the acceptable ranges of the public interest; and proposes to
net power factor range at the interface system and how to bring consistency
approve it as mandatory and between the two terms. Further, in our
that the load serving entities receive enforceable.
service from the Bulk-Power System discussion of general issues concerning
during normal and extreme load 14. Glossary of Terms Used in the communication (COM) Reliability
conditions. Reliability Standards Standards, we identified specific
1147. While the Commission has concerns regarding the definitions of
a. NERC Proposal
identified a number of concerns with transmission operator and generator
regard to VAR–001–1, we believe that 1151. In its petition, NERC submitted, operator. We propose to direct that
the proposal serves an important and requested approval of the Glossary NERC modify the glossary to reflect
purpose in requiring users, owners and of Terms Used in Reliability Standards. these concerns.
operators of the Bulk-Power System to NERC states that the glossary, which 1155. With regard to commenters
maintain facilities within voltage limits. defines terms used in Reliability concerns regarding the consistency of
The Commission believes it is important Standards, initially became effective on definitions between the glossary and the
for NERC to include Requirements April 1, 2005. The glossary is updated ERO Rules of Procedure, we believe that
which contain added specificity; and whenever a new or revised Reliability the ERO documents should be
additional Requirements to perform Standards is approved that includes a consistent in their definition of a
voltage stability assessments during new term or definition. The glossary specific term. However, we will leave it
real-time operations. Nonetheless, the may also be approved by a separate to the ERO’s discretion whether the
proposed requirements set forth in action using NERC’s Reliability glossary or the Rules of Procedure
VAR–001–1 are sufficiently clear and Standards development process. NERC should be modified to assure
objective to provide guidance for updated the glossary in its August 28, consistency in the definition of any
compliance. 2006 Supplemental Filing. particular term.
1156. Accordingly, the Commission
1148. Accordingly, giving due weight b. Staff Preliminary Assessment

to the technical expertise of the ERO proposes to approve the Glossary of
1152. While staff did not globally Terms Used in Reliability Standards. In
and with the expectation that the
address the NERC glossary, it did addition, we propose to direct that
343 See Principles of Efficient and Reliable express concern regarding the definition NERC submit, a modification to the
Reactive Power Supply and Consumption: FERC of bulk electric system in the glossary.
Staff Report (2005). Staff stated that differences between the 344 Staff Preliminary Assessment at 25–26.
glossary that: (1) Includes the statutory that have been implemented on a 1160. Further, as discussed in greater
definitions of Bulk-Power System, voluntary basis for many years in most detail below with regard to small
Reliable Operation, Reliability Standard, instances. Because the reporting business flexibility, NERC has indicated
as set forth in section 215 (a); (2) requirements are usual and customary that it will propose specific limits on
modifies the definitions of practices in the industry, and the applicability of Reliability Standards
‘‘transmission operator’’ and ‘‘generator respondents incur the time and to small entities that do not have a
operator’’ to include aspects unique to financial resources in the course of their material impact on the Bulk-Power
ISO/RTO and pooled resource regular activity, the transition from System. While we do not pre-judge this
organizations; (3) modifies the voluntary to mandatory Reliability proposal, we note that Commission
definition of ‘‘bulk electric system’’ Standards effected by this Proposed acceptance of such a proposal could
consistent with our discussion in the Rule will not increase the reporting also have a significant impact on the
Common Issues section above; and (4) burden nor impose any additional reporting burden of small entities that
modifies the definition of terms information collection requirements. have not previously complied with the
concerning reserves (such as operating 1158. However, we also recognize that NERC standards on a voluntary basis.
reserves) to include demand side there may be some smaller entities such
management, including controllable as municipal utilities, cooperatives and 1161. In addition, some small entities
load. small generators that may not have been may join together in Joint Action
members of NERC and may not have Agencies or other such organizations
IV. Information Collection Statement been participants in NERC’s voluntary that will be responsible for certain
1157. The Office of Management and standards program. For such entities, aspects of their members’ compliance
Budget (OMB) regulations require that compliance with the proposed with mandatory Reliability Standards.
OMB approve certain reporting and mandatory Reliability Standards will Such umbrella organizations may lessen
recordkeeping (collections of include compliance with reporting the reporting burden of individual
information) imposed by an agency.345 requirements for the first time. users, owners and operators.
The information contained here is also 1159. It is difficult to determine Accordingly, the reporting burden
subject to review under Section 3507(d) exactly how many entities fall into this estimate below, while based on the
of the Paperwork Reduction Act of category. First, as discussed above with Commission’s best information, is
1995.346 As stated above, these 107 regard to applicability issues, not every subject to numerous variables. Although
proposed Reliability Standards—of proposed Reliability Standard would there is considerable uncertainty
which the Commission proposes to apply to every user, owner or operator regarding the number of entities or the
approve 83 in a final rule—make up the of the Bulk-Power System, and each burden on those entities for which
current NERC standards that the electric proposed Reliability Standard contains compliance with reliability standards
industry currently is expected to its own set of reporting requirements. will be a new exercise and not a
comply with on a voluntary basis. For example, only 24 proposed customary practice, the Commission
Therefore, in proposing to adopt the Reliability Standards would apply to provides below what it believes to be a
Reliability Standards, the Commission generators, which contain 142 reporting reasonable estimate based on available
would adopt reporting requirements requirements. information.
PUBLIC REPORTING BURDEN

Number of
Number of Number of Total annual
Data collection hours per
respondents responses hours
response
FERC–725A ..................................................................................................... 2,000 1 100 200,000
Information Collection Costs: The that the Commission may approve a the burden estimates associated with the
Commission seeks comments on the proposed Reliability Standard if it information requirements.
costs on complying with these determines that the proposal is just, 1169. Interested person may obtain
requirements. It has projected the reasonable, not unduly discriminatory information on the reporting
average annualized cost to be the or preferential, and in the public requirements by contacting the
following: interest. following: Federal Energy Regulatory
200,000 hours @ $200 an hour = $ Commission, 888 First Street, NE.,
40,000,000. 1168. Internal Review: The
Commission has reviewed the proposed Washington, DC 20426 [Attention:
1162. Title: Bulk Power System Michael Miller, Office of the Executive
Mandatory Reliability Standards. reliability standards and made a
Director, Phone: (202) 502–8415, fax:
1163. Action: Proposed Collection. determination that these requirements
1164. OMB Control No. To be (202) 273–0873, e-mail:
are necessary to implement section 215
Determined. michael.miller@ferc.gov.
of the Energy Policy Act of 2005. These
1165. Respondents: Businesses or requirements conform to the 1170. For submitting comments
other for profit; not for profit concerning the collection(s) of
Commission’s plan for efficient
institutions. information and the associated burden
information collection, communication
1166. Frequency of Responses: On estimate(s), please send your comments
and management within the energy to the contact listed above and to the
Occasion.
1167. Necessity of the Information: industry. The Commission has to assure Office of Information and Regulatory
This proposed rule implements section itself, by means of internal review, that Affairs, Office of Information and
215(d)(2) of the FPA, which provides there is specific, objective support for Regulatory Affairs, Washington, DC
345 5 CFR 1320.11. 346 44 U.S.C. 3507(d).
20503 [Attention: Desk Officer for the authorities, transmission operators, lessen the economic impact on the
Federal Energy Regulatory Commission, transmission owners, generator proposed rule on small entities.354 We
phone (202) 395–4650, fax: (202) 395– operators, generator owners, interchange emphasize, however, that any such
7285, e-mail: authorities, transmission service limits must not weaken Bulk-Power
oira_submission@omb.eop.gov. providers, market operators, planning System reliability.
authorities, transmission planners,
V. Environmental Analysis VII. Comment Procedures
resource planners, load-serving entities,
1171. The Commission is required to purchasing-selling entities, and 1177. The Commission invites
prepare an Environmental Assessment distribution providers.350 interested persons to submit comments
or an Environmental Impact Statement 1174. As explained by NERC, a on the matters and issues proposed in
for any action that may have a generator operator, for example, could this notice to be adopted, including any
significant adverse effect on the human include any entity that operates a related matters or alternative proposals
environment.347 The actions proposed generator interconnected to the grid, be that commenters may wish to discuss.
here fall within the categorical it a large unit in excess of 1,000 MW or Comments are due January 2, 2007.
exclusion in the Commission’s a small generator of one MW or less. Comments must refer to Docket No.
regulations for rules that are clarifying, NERC states that to ensure that RM06–16–000, and must include the
corrective or procedural, for information Reliability Standards are applied cost commenter’s name, the organization
gathering, analysis, and effectively and that the applicability of represented, if applicable, and the
dissemination.348 Reliability Standards is focused on commenter’s address. Comments may be
VI. Regulatory Flexibility Act entities having a material impact on filed either in electronic or paper
Certification Bulk-Power System reliability; it will format.
begin providing greater specificity in the 1178. Comments may be filed
1172. The Regulatory Flexibility Act applicability section of a Reliability electronically via the eFiling link on the
of 1980 (RFA) 349 requires that a Standard.351 For example, a Reliability Commission’s Web site at http://
rulemaking contain either a description Standard may identify limitations on www.ferc.gov. The Commission accepts
and analysis of the effect that the applicability based on electric facility most standard word processing formats
proposed rule will have on small characteristics, such as generators with and commenters may attach additional
entities or a certification that the rule a minimum nameplate rating or a files with supporting information in
will not have a significant economic transmission facility energized at a certain other file formats. Commenters
impact on a substantial number of small specified kV level or greater.352 NERC filing electronically do not need to make
entities. The RFA mandates plans to establish a set of guidelines to a paper filing. Commenters that are not
consideration of regulatory alternatives address this matter. able to file comments electronically
that accomplish the stated objectives of 1175. The Commission believes that must send an original and fourteen (14)
a proposed rule and that minimize any the proposed Reliability Standards may copies of their comments to: Federal
significant economic impact on a cause some small entities to experience Energy Regulatory Commission, Office
substantial number of small entities and significant economic impact. While the of the Secretary, 888 First Street, NE.,
sends the certification to the Chief Commission is mindful of the possible Washington, DC 20426.
Counsel for Advocacy of the Small impact on small entities, the
Business Administration (SBA). The Commission is also concerned that VIII. Document Availability
SBA’s Office of Size Standards develops Bulk-Power System reliability not be 1179. In addition to publishing the
the numerical definition of a small compromised based on an full text of this document in the Federal
business. (See 13 CFR 121.201.) For unwillingness of entities, large or small, Register, the Commission provides all
electric utilities, a firm is small if, to incur reasonable expenditures interested persons an opportunity to
including its affiliates, it is primarily necessary to preserve such reliability. view and/or print the contents of this
engaged in the transmission, generation As we explained in Order No. 672: document via the Internet through
and/or distribution of electric energy for FERC’s Home Page (http://www.ferc.gov)
sale and its total electric output for the A proposed Reliability Standard may take
into account the size of the entity that must and in FERC’s Public Reference Room
preceding 12 months did not exceed during normal business hours (8:30 a.m.
comply with the Reliability Standard and the
four million megawatt hours. cost to those entities of implementing the to 5 p.m. Eastern time) at 888 First
1173. Section 215(b) of the FPA proposed Reliability Standard. However, the Street, NE., Room 2A, Washington, DC
requires all users, owners and operators ERO should not propose a ‘‘lowest common 20426.
of the Bulk-Power System to comply denominator’’ Reliability Standard that 1180. From the Commission’s Home
with Commission-approved Reliability would achieve less than excellence in
Page on the Internet, this information is
Standards. As discussed above, each operating system reliability solely to protect
against reasonable expenses for supporting available in the Commission’s document
proposed Reliability Standard submitted
this vital national infrastructure. For management system, eLibrary. The full
for approval by NERC applies to some
example, a small owner or operator of the text of this document is available on
subset of users, owners and operators. Bulk Power-System must bear the cost of eLibrary in PDF and Microsoft Word
Each proposed Reliability Standard complying with each Reliability Standard format for viewing, printing, and/or
includes an ‘‘applicability’’ statement that applies to it.353 downloading. To access this document
that identifies the functional classes of 1176. While we cannot rule on the in eLibrary, type the docket number
entities responsible for compliance. merits until a specific proposal has been excluding the last three digits of this
Such functional classes include submitted, we believe that reasonable document in the docket number field.
reliability coordinators, balancing limits on applicability based on size 1181. User assistance is available for
may be an acceptable alternative to eLibrary and the FERC’s Web site during
347 Regulations Implementing the National
Environmental Policy Act, Order No. 486, 52 FR normal business hours. For assistance,
350 See NERC Petition at 9–10.
47,897 (Dec. 17, 1987), FERC Stats. & Regs., 351 Id.
please contact FERC Online Support at
at 81–82.
Regulations Preambles 1986–1990 ¶ 30,783 (1987). 352 Id. at 10.
348 18 CFR 380.4(a)(5). 354 See, discussion of Applicability to Small
349 5 U.S.C. 601–12. 353 Order No. 672 at P 330. Entities, section III.B.3. above.
1–866–208–3676 (toll free) or 202–502– 40.1 Applicability. North American Electric Reliability
6652 (e-mail at 40.2 Mandatory Reliability Standards. Corporation which can be obtained from
FERCOnlineSupport@FERC.gov), or the 40.3 Availability of Reliability Standards. the Commission’s Public Reference
Public Reference Room at 202–502– Authority: 16 U.S.C. 824o. Room at 888 First Street, NE., Room 2A,
8371, TTY 202–502–8659 (e-mail at Washington, DC 20426.
public.referenceroom@ferc.gov). § 40.1 Applicability.
(a) This part applies to all users, (b) A proposed modification to a
List of Subjects in 18 CFR Part 40 Reliability Standard proposed to
owners and operators of the Bulk-Power
Electric power, Reporting and System within the United States (other become effective pursuant to § 39.5 of
recordkeeping requirements. than Alaska or Hawaii), including, but this Chapter will not be effective until
By direction of the Commission. not limited to, entities described in approved by the Commission.
Magalie R. Salas, section 201(f) of the Federal Power Act. § 40.3 Availability of Reliability Standards.
Secretary. (b) Each Reliability Standard made
effective by § 40.2 must identify the The Electric Reliability Organization
In consideration of the foregoing, the subset of users, owners and operators of must make each effective Reliability
Commission proposes to amend Chapter the Bulk-Power System to which a Standard available on its Internet Web
I, Title 18, Code of Federal Regulations, particular Reliability Standard applies. site.
by adding part 40 to read as follows:
§ 40.2 Mandatory Reliability Standards. Note: The following appendices will not be
PART 40—MANDATORY RELIABILITY published in the Code of Federal
STANDARDS FOR THE BULK-POWER (a) Each applicable user, owner or Regulations.
SYSTEM operator of the Bulk-Power System must
comply with Commission-approved
Sec. Reliability Standards developed by the
APPENDIX A.—PROPOSED DISPOSITION OF STANDARDS, GLOSSARY AND REGIONAL DIFFERENCES

Reliability standard Title Proposed disposition
BAL–001–0 ................ Real Power Balancing Control Performance ..................................... Approve.

BAL–002–0 ................ Disturbance Control Performance ...................................................... Approve; direct modification.
BAL–003–0 ................ Frequency Response and Bias .......................................................... Approve; direct modification.
BAL–004–0 ................ Time Error Correction ........................................................................ Approve; direct modification.
BAL–005–0 ................ Automatic Generation Control ............................................................ Approve; direct modification.
BAL–006–1 ................ Inadvertent Interchange ..................................................................... Approve; direct modification.
CIP–001–0 ................. Sabotage Reporting ........................................................................... Approve; direct modification.
COM–001–0 .............. Telecommunications .......................................................................... Approve; direct modification.
COM–002–1 .............. Communications and Coordination .................................................... Approve; direct modification.
EOP–001–0 ............... Emergency Operations Planning ....................................................... Approve; direct modification.
EOP–002–1 ............... Capacity and Energy Emergencies ................................................... Approve; direct modification.
EOP–003–0 ............... Load Shedding Plans ......................................................................... Approve; direct modification.
EOP–004–0 ............... Disturbance Reporting ....................................................................... Approve; direct modification.
EOP–005–1 ............... System Restoration Plans .................................................................. Approve; direct modification.
EOP–006–0 ............... Reliability Coordination—System Restoration ................................... Approve; direct modification.
EOP–007–0 ............... Establish, Maintain, and Document a Regional Blackstart Capability Pending.
Plan.
EOP–008–0 ............... Plans for Loss of Control Center Functionality .................................. Approve; direct modification.
EOP–009–0 ............... Documentation of Blackstart Generating Unit Test Results .............. Approve.
FAC–001–0 ............... Facility Connection Requirements ..................................................... Approve.
FAC–002–0 ............... Coordination of Plans for New Facilities ............................................ Approve; direct modification.
FAC–003–1 ............... Transmission Vegetation Management Program .............................. Approve; direct modification.
FAC–004–0 ............... Methodologies for Determining Electrical Facility Ratings ................ Withdrawn.
FAC–005–0 ............... Electrical Facility Ratings for System Modeling ................................. Withdrawn.
FAC–008–1 ............... Facility Ratings Methodology ............................................................. Approve; direct modification.
FAC–009–1 ............... Establish and Communicate Facility Ratings .................................... Approve.
FAC–012–1 ............... Transfer Capabilities Methodology .................................................... Pending.
FAC–013–1 ............... Establish and Communicate Transfer Capabilities ............................ Approve; direct modification.
INT–001–1 ................. Interchange Transaction Tagging ...................................................... Approve; direct modification.
INT–002–0 ................. Interchange Transaction Tag Communication and Assessment ....... Withdrawn.
INT–003–1 ................. Interchange Transaction Implementation ........................................... Approve; direct modification.
INT–004–1 ................. Interchange Transaction Modifications .............................................. Approve; direct modification.
INT–005–1 ................. Interchange Authority Distributes Arranged Interchange ................... Approve; direct modification.
INT–006–1 ................. Response to Interchange Authority ................................................... Approve; direct modification.
INT–007–1 ................. Interchange Confirmation ................................................................... Approve.
INT–008–1 ................. Interchange Authority Distributes Status ........................................... Approve.
INT–009–1 ................. Implementation of Interchange .......................................................... Approve.
INT–010–1 ................. Interchange Coordination Exceptions ................................................ Approve.
IRO–001–0 ................ Reliability Coordination—Responsibilities and Authorities ................ Approve; direct modification.
IRO–002–0 ................ Reliability Coordination—Facilities ..................................................... Approve; direct modification.

IRO–003–1 ................ Reliability Coordination—Wide Area View ......................................... Approve; direct modification.
IRO–004–1 ................ Reliability Coordination—Operations Planning .................................. Approve; direct modification.
IRO–005–1 ................ Reliability Coordination—Current Day Operations ............................ Approve; direct modification.
IRO–006–3 ................ Reliability Coordination—Transmission Loading Relief ..................... Approve; direct modification.
IRO–014–1 ................ Procedures, Processes, or Plans to Support Coordination Between Approve.
Reliability Coordinators.
APPENDIX A.—PROPOSED DISPOSITION OF STANDARDS, GLOSSARY AND REGIONAL DIFFERENCES—Continued

IRO–015–1 ................ Notifications and Information Exchange Between Reliability Coordi- Approve.
nators.
IRO–016–1 ................ Coordination of Real-time Activities Between Reliability Coordina- Approve.
tors.
MOD–001–0 .............. Documentation of TTC and ATC Calculation Methodologies ............ Pending.
MOD–002–0 .............. Review of TTC and ATC Calculations and Results .......................... Pending.
MOD–003–0 .............. Procedure for Input on TTC and ATC Methodologies and Values ... Pending.
MOD–004–0 .............. Documentation of Regional CBM Methodologies .............................. Pending.
MOD–005–0 .............. Procedure for Verifying CBM Values ................................................. Pending.
MOD–006–0 .............. Procedures for Use of CBM Values .................................................. Approve; direct modification.
MOD–007–0 .............. Documentation of the Use of CBM .................................................... Approve; direct modification.
MOD–008–0 .............. Documentation and Content of Each Regional TRM Methodology .. Pending.
MOD–009–0 .............. Procedure for Verifying TRM Values ................................................. Pending.
MOD–010–0 .............. Steady-State Data for Transmission System Modeling and Simula- Approve; direct modification.
tion.
MOD–011–0 .............. Regional Steady-State Data Requirements and Reporting Proce- Pending.
dures.
MOD–012–0 .............. Dynamics Data for Transmission System Modeling and Simulation Approve; direct modification.
MOD–013–1 .............. RRO Dynamics Data Requirements and Reporting Procedures ...... Pending.
MOD–014–0 .............. Development of Interconnection-Specific Steady State System Pending.
Models.
MOD–015–0 .............. Development of Interconnection-Specific Dynamics System Models Pending.
MOD–016–1 .............. Actual and Forecast Demands, Net Energy for Load, Controllable Approve; direct modification.
DSM.
MOD–017–0 .............. Aggregated Actual and Forecast Demands and Net Energy for Approve; direct modification.
Load.
MOD–018–0 .............. Reports of Actual and Forecast Demand Data ................................. Approve.
MOD–019–0 .............. Forecasts of Interruptible Demands and DCLM Data ....................... Approve; direct modification.
MOD–020–0 .............. Providing Interruptible Demands and DCLM Data ............................ Approve; direct modification.
MOD–021–0 .............. Accounting Methodology for Effects of Controllable DSM in Fore- Approve; direct modification.
casts.
MOD–024–1 .............. Verification of Generator Gross and Net Real Power Capability ...... Pending.
MOD–025–1 .............. Verification of Generator Gross and Net Reactive Power Capability Pending.
PER–001–0 ............... Operating Personnel Responsibility and Authority ............................ Approve.
PER–002–1 ............... Operating Personnel Training ............................................................ Approve; direct modification.
PER–003–0 ............... Operating Personnel Credentials ....................................................... Approve; direct modification.
PER–004–0 ............... Reliability Coordination—Staffing ....................................................... Approve; direct modification.
PRC–001–0 ............... System Protection Coordination ........................................................ Approve; direct modification.
PRC–002–0 ............... Define and Document Disturbance Monitoring Equipment Require- Pending.
ments.
PRC–003–1 ............... Regional Requirements for Analysis of Misoperations of Trans- Pending.
mission and Generation Protection Systems.
PRC–004–1 ............... Analysis and Mitigation of Transmission and Generation Protection Approve.
System Misoperations.
PRC–005–1 ............... Transmission and Generation Protection System Maintenance and Approve; direct modification.
Testing.
PRC–006–0 ............... Development and Documentation of Regional UFLS Programs ....... Pending.
PRC–007–0 ............... Assuring Consistency with Regional UFLS Program ........................ Approve.
PRC–008–0 ............... Underfrequency Load Shedding Equipment Maintenance Programs Approve; direct modification.
PRC–009–0 ............... UFLS Performance Following an Underfrequency Event .................. Approve.
PRC–010–0 ............... Assessment of the Design and Effectiveness of UVLS Program ..... Approve; direct modification.
PRC–011–0 ............... UVLS System Maintenance and Testing ........................................... Approve; direct modification.
PRC–012–0 ............... Special Protection System Review Procedure .................................. Pending.
PRC–013–0 ............... Special Protection System Database ................................................ Pending.
PRC–014–0 ............... Special Protection System Assessment ............................................ Pending.
PRC–015–0 ............... Special Protection System Data and Documentation ........................ Approve.
PRC–016–0 ............... Special Protection System Misoperations ......................................... Approve; direct modification.
PRC–017–0 ............... Special Protection System Maintenance and Testing ....................... Approve; direct modification.
PRC–018–1 ............... Disturbance Monitoring Equipment Installation and Data Reporting Approve.
PRC–020–1 ............... Under-Voltage Load Shedding Program Database ........................... Pending.
PRC–021–1 ............... Under-Voltage Load Shedding Program Data ................................... Approve.
PRC–022–1 ............... Under-Voltage Load Shedding Program Performance ...................... Approve.
TOP–001–0 ............... Reliability Responsibilities and Authorities ........................................ Approve; direct modification.
TOP–002–1 ............... Normal Operations Planning .............................................................. Approve; direct modification.
TOP–003–0 ............... Planned Outage Coordination ............................................................ Approve; direct modification.
TOP–004–0 ............... Transmission Operations ................................................................... Approve; direct modification.

TOP–005–1 ............... Operational Reliability Information ..................................................... Approve; direct modification.
TOP–006–0 ............... Monitoring System Conditions ........................................................... Approve; direct modification.
TOP–007–0 ............... Reporting SOL and IROL Violations .................................................. Approve.
TOP–008–0 ............... Response to Transmission Limit Violations ....................................... Approve; direct modification.
TPL–001–0 ................ System Performance Under Normal Conditions ................................ Approve; direct modification.
TPL–002–0 ................ System Performance Following Loss of a Single BES Element ....... Approve; direct modification.
APPENDIX A.—PROPOSED DISPOSITION OF STANDARDS, GLOSSARY AND REGIONAL DIFFERENCES—Continued

TPL–003–0 ................ System Performance Following Loss of Two or More BES Ele- Approve; direct modification.
ments.
TPL–004–0 ................ System Performance Following Extreme BES Events ...................... Approve; direct modification.
TPL–005–0 ................ Regional and Interregional Self-Assessment Reliability Reports ...... Pending.
TPL–006–0 ................ Assessment Data from Regional Reliability Organizations ............... Pending.
VAR–001–1 ............... Voltage and Reactive Control ............................................................ Approve; direct modification.
VAR–002–1 ............... Generator Operations for Maintaining Network Voltage Schedules .. Approve
Glossary .................... Glossary of Terms Used in Reliability Standards .............................. Approve; direct modification.
Regional Difference ... BAL–001: ERCOT: CPS2 .................................................................. Approve.
Regional Difference ... INT–001/4: WECC Tagging Dynamic Schedules and Inadvertent Pending.
Payback.
Regional Difference ... BAL–006: MISO RTO inadvertent Interchange Accounting .............. Approve.
Regional Difference ... BAL–006: MISO/SPP Financial Inadvertent Settlement .................... Approve.
Regional Difference ... INT–003: MISO/SPP Scheduling Agent ............................................ Approve.
Regional Difference ... INT–003: MISO Enhanced Scheduling Agent ................................... Approve.
Regional Difference ... INT–001/3: MISO Energy Flow Information ....................................... Approve.
Regional Difference ... IRO–006: PJM/MISO/SPP Enhanced Congestion Management ...... Pending.
APPENDIX B.—COMMENTERS ON STAFF PRELIMINARY ASSESSMENT

Abbreviation Commenter
Alberta ................................................................................ Alberta Department of Energy; Alberta Utilities and Energy Board; Alberta Electric
System Operator.
Alcoa .................................................................................. Alcoa, Inc. and Alcoa Power Generating Company.
Allegheny ............................................................................ Allegheny Power and Allegheny Energy Supply Company, LLC.
Ameren Services Co .......................................................... Ameren.
American Transmission ...................................................... American Transmission Company, LLC.
Professor Bose ................................................................... Professor Anjan Bose.
APPA .................................................................................. American Public Power Association.
BG&E ................................................................................. Baltimore Gas & Electric Company.
BPA .................................................................................... Bonneville Power Administration.
CPUC ................................................................................. Public Utilities Commission of the State of California.
CEA .................................................................................... Canadian Electricity Association.
Centerpoint ......................................................................... CenterPoint Energy Houston Electric, LLC.
Redding .............................................................................. City of Redding, California.
Duke ................................................................................... Duke Energy Corporation.
E.ON U.S ........................................................................... E.ON U.S. LLC.
EEI ...................................................................................... Edison Electric Institute.
FPL Energy ........................................................................ FPL Energy.
FRCC ................................................................................. Florida Reliability Coordinating Council.
Georgia System ................................................................. Georgia System Operations Corporation.
Hydro One .......................................................................... Hydro One Networks Inc.
ISO/RTO Council ............................................................... The ISO/RTO Council.
KeySpan ............................................................................. KeySpan—Ravenswood, LLC.
LPPC .................................................................................. Large Public Power Council.
MEAG ................................................................................. MEAG Power.
MidAmerican ...................................................................... MidAmerican Energy Company.
MISO .................................................................................. Midwest Independent Transmission System Operator, Inc.
MRO ................................................................................... Midwest Reliability Organization.
Multiple Intervenors ............................................................ Multiple Intervenors, an unincorporated association of approximately 55 large indus-
trial, commercial and institutional end-use energy consumers with facilities in New
York.
National Grid ...................................................................... National Grid USA.
NCPA ................................................................................. Northern California Power Agency.
NEMA ................................................................................. National Electrical Manufacturers Association.
NERC ................................................................................. North American Electric Reliability Council.
New York Commission ....................................................... New York State Public Service Commission.
NPCC ................................................................................. Northeast Power Coordinating Council.
NRECA ............................................................................... National Rural Electric Cooperative Association.
NYSRC ............................................................................... New York State Reliability Council LLC.
Ohio Consumers’ Council .................................................. Ohio Consumers’ Council.
Old Dominion ..................................................................... Old Dominion Electric Cooperative.
Ontario IESO ...................................................................... Ontario Independent Electricity System Operator.
PG&E ................................................................................. Pacific Gas & Electric Company.

PSEG Companies .............................................................. Public Service Electric & Gas Company, PSEG Energy Resources & Trade LLC,
PSEG Power LLC.
ReliabilityFirst ..................................................................... ReliabilityFirst Corporation.
SDG&E ............................................................................... San Diego Gas & Electric Company.
SoCal Edison ..................................................................... Southern California Edison Company.
Southern ............................................................................. Southern Company Services, Inc.
APPENDIX B.—COMMENTERS ON STAFF PRELIMINARY ASSESSMENT—Continued

Abbreviation Commenter
Southwest TDU .................................................................. Southwest Transmission Dependent Utility Group.

TANC .................................................................................. Transmission Agency of Northern California.
TAPS .................................................................................. Transmission Access Policy Study Group.
TVA .................................................................................... Tennessee Valley Authority.
USDA Forest Service ......................................................... U.S. Department of Agriculture Forest Service.
Valley Group ...................................................................... The Valley Group, Inc.
WECC ................................................................................ Western Electricity Coordinating Council.
WECC OIWG ..................................................................... Operating Issues Work Group, a work group of WECC’s Compliance Monitoring and
Operating Practices Subcommittee.
WECC/OTS ........................................................................ Operations and Training Subcommittee, a subcommittee of WECC’s Operating Com-
mittee.
Wisconsin Electric .............................................................. Wisconsin Electric Power Company.
APPENDIX C.—ABBREVIATIONS IN THIS DOCUMENT

ACE .................................................................................... Area Control Error.
AGC .................................................................................... Automatic Generation Control.
ANSI ................................................................................... American National Standards Institute.
ATC .................................................................................... Available Transfer Capability.
BCP .................................................................................... Blackstart Capability Plan.
CBM ................................................................................... Capacity Benefit Margin.
CPS .................................................................................... Control Performance Standard.
DC ...................................................................................... Direct Current.
DCS .................................................................................... Disturbance Control Standard.
ERO .................................................................................... Electric Reliability Organization.
GWh ................................................................................... Gigawatt Hour.
IEEE ................................................................................... Institute of Electrical and Electronics Engineers.
IROL ................................................................................... Interconnection Reliability Operating Limits.
MW ..................................................................................... Mega Watt.
ROW ................................................................................... Right of Way.
SOL .................................................................................... System Operating Limit.
SPS .................................................................................... Special Protection System.
TIS ...................................................................................... Transmission Issues Subcommittee.
TLR ..................................................................................... Transmission Loading Relief.
TRM .................................................................................... Transmission Reliability Margin.
TTC .................................................................................... Total Transfer Capability.
UFLS .................................................................................. Under Frequency Load Shedding.
UVLS .................................................................................. Under Voltage Load Shedding.
APPENDIX D.—HIGH PRIORITY LIST

Reliability standard Title
COM–001–0 ....................................................................... Telecommunications.

COM–002–1 ....................................................................... Communications and Coordination.
EOP–002–0 ........................................................................ Capacity and Energy Emergency.
EOP–003–0 ........................................................................ Load Shedding Plans.
EOP–008–0 ........................................................................ Plans for Loss of Control Center Functionality.
FAC–003–1 ........................................................................ Vegetation Management Program.
FAC–008–1 ........................................................................ Facility Ratings Methodology.
IRO–003–1 ......................................................................... Reliability Coordination—Wide Area View.
IRO–006–3 ......................................................................... Reliability Coordination—Transmission Loading Relief.
PER–002–0 ........................................................................ Operating Personnel Training.
PER–003–0 ........................................................................ Operating Personnel Credentials.
PER–004–0 ........................................................................ Reliability Coordination—Staffing.
PRC–006–0 ........................................................................ Development and Documentation of Regional UFLS Programs.
PRC–020–1 ........................................................................ Under-Voltage Load Shedding Program Database.
TOP–006–0 ........................................................................ Monitoring System Conditions.
VAR–001–1 ........................................................................ Voltage and Reactive Control.
[FR Doc. 06–8927 Filed 11–2–06; 8:45 am]

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1. Legal Standard for Approval of Reliability Standards ...................................................................................................... 72

2. Measures and Levels of Non-Compliance .......................................................................................................................... 103

Appendix A: Proposed Disposition of Standards, Glossary and Regional Differences

I. Introduction Reliability Standards that should be be enforced by the ERO, subject to

Reliability Standards, a Glossary of Terms Used in

11 The Electric Power Outages in the Western

Order, 116 FERC ¶ 61,062 at P 518.

Preliminary Assessment describes 1. Applicability

Standard. entity, (13) purchasing-selling entity, (14)

49 MOD–001, MOD–002, MOD–003, MOD–004,

period that commences with the be necessary to expedite processing a

79 ‘‘Levels of Non-Compliance’’ are established

period applies. The Commission seeks

Petition at 83. WECC. 87 Staff Preliminary Assessment at 19.

PRC–014. NERC proposes that these 3 standards, along with

addressed by a continent-wide 1. BAL: Resource and Demand redundant Requirements identified by

procedures. ERO Certification Order, 116 FERC

FRR_White_Paper_v12_1–27–06.pdf; ERCOT Energy responsibility to a Regional Entity) applies to each

and load come in balance again.

indicates that the efficiency of the time www.nerc.com/~filez/∼timerror.html. Yearly data

regarding a statement in the Staff Task Force), Frequency Response Standard

140 The American Heritage Dictionary defines

Power System. Staff also found the

orderly manner in the event of a partial or total

that backup control facilities can be

(2003), order on reh’g, Order No. 2003–A, 69 FR

voltages. These Transmission Owner-specific

186 NERC glossary at 8 defines ‘‘Transaction’’ as 1, INT–006–1, INT–007–1, INT–008–1, INT–009–1,

190 OrderNo. 672 at P 249.

195 Order No. 672 at P 290. approve Reliability Standard INT–003–

related to Reliability Standard INT–001–1. The

reliability coordinator is ‘‘the entity with the

potential interface and other SOL and IROL

223 TPL–002–0 System Performance Following

approach and the flowgate approach. However, the

over all transmission lines (or paths) between those

purpose represented to the Commission iv. Commission Proposal iii. Comments

However, the planning authority is the i. NERC Proposal

682. NERC acknowledges that difficulty in obtaining unit-specific data

individual appliances or equipment on customer NERC submit a modification to MOD–

276 Staff Preliminary Assessment at 89–90.

wide range of topics related to the

PRC–008–0; PRC–009–0; PRC–010–0; PRC–011–0;

285 We note that PRC–002–0 has been revised and

832. Because the regional procedures protection systems to analyze all

reliability impact of a potential failure impact on the reliability of the Bulk-

comments apply to PRC–011–0 as well.

i. NERC Proposal RTO Council and NERC regarding

have been filed. discriminatory or preferential, and in iii. Comments

297 We note that NERC’s reliability functional

proposed Reliability Standard TOP–005–1 will

contingencies that must be evaluated

of FERC Form No. 715, Transmission Planning

Operation’’ as ‘‘means’’ operating the elements of

probability simulation would not, by itself, warrant

connected to or supplied by the Faulted element or

329 NERC TIS Report at 15.

critical system conditions be

a. Overview these Requirements may not be

transmission owners to specify criteria that exempt

1148. Accordingly, giving due weight b. Staff Preliminary Assessment

PUBLIC REPORTING BURDEN